Is NRG Energy, Inc. overvalued or undervalued?

As of 23 May 2025, the valuation grade for NRG Energy, Inc. has moved from expensive to very expensive, indicating a significant increase in perceived valuation. The company is currently considered overvalued. Key ratios include a P/E ratio of 29, a Price to Book Value of 21.02, and an EV to EBITDA of 18.07, all of which are substantially higher than industry peers. For instance, Vistra Corp. has a P/E ratio of 17.23 and an EV to EBITDA of 8.24, while Ameren Corp. shows a P/E of 21.78 and an EV to EBITDA of 14.01, highlighting NRG's premium valuation relative to its competitors.
Despite a strong performance with a year-to-date return of 68.53% compared to the S&P 500's 2.44%, the elevated valuation metrics suggest that NRG Energy, Inc. is not justified at its current price of 152.05. The high PEG ratio of 2.12 further emphasizes the overvaluation, as it indicates that the company's growth is not sufficiently high to warrant such a premium. Overall, the combination of high valuation ratios and the significant grade change supports the conclusion that NRG Energy, Inc. is overvalued in the current market.