Does NRG Energy have money to sustain growth?

This firm chance of financial distress is now about 36.0 percent. What is NRG Energy Target Price Odds to finish over Current Price? Pertaining to normal probability distribution, the odds of NRG Energy to move above current price in 30 days from now is about 9.72%. The NRG Energy probability density function shows the probability of NRG Energy Stock to fall within a particular range of prices over 30 days . Considering 30-days investment horizon, NRG Energy has beta of -0.0591 indicating as returns on benchmark increase, returns on holding NRG Energy are expected to decrease at a much smaller rate. During bear market, however, NRG Energy is likely to outperform the market. Additionally, the company has an alpha of 0.2453 implying that it can potentially generate 0.2453% excess return over Russell 2000 after adjusting for the inherited market risk (beta).
Published over a year ago
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Reviewed by Gabriel Shpitalnik

NRG Energy has beta of 0.49. As returns on market increase, NRG Energy returns are expected to increase less than the market. However during bear market, the loss on holding NRG Energy will be expected to be smaller as well. NRG Energy dividends can provide a clue to current valuation of the stock. The firm one year expected dividend income is about $0.06 per share. Earning per share calculations of the firm is based on official Zacks consensus of 2 analysts regarding NRG Energy future annual earnings. Given the historical accuracy of 68.02%, the future earnings per share of the company is estimated to be 3.92 with lowest and highest values of 3.8 and 4.04 respectively. Please note that this consensus of annual earnings estimates for the entity is an estimate of EPS before non-recurring items and including employee stock options expenses.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as NRG Energy. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for NRG Energy

Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of NRG Energy's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as NRG Energy. Your research has to be compared to or analyzed against NRG Energy's peers to derive any actionable benefits. When done correctly, NRG Energy's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in NRG Energy.

How important is NRG Energy's Liquidity

NRG Energy financial leverage refers to using borrowed capital as a funding source to finance NRG Energy ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. NRG Energy financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to NRG Energy's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of NRG Energy's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between NRG Energy's total debt and its cash.

NRG Energy Gross Profit

NRG Energy Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing NRG Energy previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show NRG Energy Gross Profit growth over the last 10 years. Please check NRG Energy's gross profit and other fundamental indicators for more details.

A Deeper Perspective

The company reported last year revenue of 9.58 B. Total Income to common stockholders was 455 M with profit before taxes, overhead, and interest of 2.37 B. The latest bullish price patterns experienced by current NRG Energy shareholders may encourage investors to take a closer look at the firm as it closed today at a share price of 40.47 on 1793374.000 in trading volume. The company management have been very successful with rebalancing the firm components at opportune times to take advantage of market volatility in October. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.2997. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. NRG Energy preserves 16.06  of operating margin. NRG Energy is trading at 40.81 which is 0.29 percent increase. Today lowest is 40.47. NRG Energy Share Based Compensation is increasing over the last 4 years. The ongoing value of NRG Energy Share Based Compensation is 23,873,684. Moreover, NRG Energy Effect of Exchange Rate Changes on Cash is increasing over the last 4 years. The previous year value of NRG Energy Effect of Exchange Rate Changes on Cash was 1,477,193.
To sum up, our analysis show that NRG Energy Almost mirrors market. The firm is undervalued and projects odds of financial distress below average for the next 2 years. Our ongoing 'Buy vs. Hold vs. Sell' recommendation on the firm is Strong Hold.

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This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of NRG Energy. Please refer to our Terms of Use for any information regarding our disclosure principles.

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