NRG Energy, Inc. (NRG) DCF Valuation
A meaningful DCF fair value isn't available for NRG Energy, Inc. (NRG) — its free-cash-flow and net-debt profile makes a standard discounted-cash-flow model unreliable (common for loss-makers and high-net-debt or recently-public companies), and no analyst DCF is published. Explore your own assumptions with the editable model below.
What would today's price require?
$135.06 is justified only if free cash flow grows about +58.5% a year (fading to 2.5% long-run) at a 10.1% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 13.4%/yr | 11.1% | N/A |
| Base case | 16.4%/yr | 10.1% | N/A |
| Optimistic | 19.4%/yr | 9.1% | N/A |
| Analyst DCF (FMP) | independent reference — different model | $273.87 | |
Current Price
$135.06
Market-Implied Growth
+58.5%/yr
vs +16.4% 5Y actual
Base-Case Model Value
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NRG DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for NRG (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $379.5M · 0.21B shares · net debt $11.9B
Estimated Fair Value
$10.81
-92.0% vs $135.06
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 16.4%/yr FCF growth and 10-year horizon fixed. Green = above today's $135.06; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.1% | $29.35 | $34.41 | $40.37 | $47.50 | $56.19 |
| 9.1% | $15.79 | $19.26 | $23.27 | $27.92 | $33.41 |
| 10.1% | $5.52 | $8.00 | $10.81 | $14.01 | $17.70 |
| 11.1% | — | — | $1.36 | $3.65 | $6.24 |
| 12.1% | — | — | — | — | — |
About NRG Energy, Inc.
NRG Energy, Inc., together with its affiliated entities, operates as a comprehensive power utility spanning the United States. Its operations are divided into three main geographical divisions: Texas, East, and West. The company plays a crucial role in generating, distributing, and selling electricity and various related services, serving approximately six million customers across residential, commercial, industrial, and wholesale sectors. Their energy generation capabilities are diverse, drawing from natural gas, coal, oil, solar, nuclear, and battery storage technologies. Beyond core power provision, NRG offers an extensive array of solutions, including centralized system power, decentralized generation, renewable energy products, emergency backup power, distributed solar and storage installations, demand-side management, energy efficiency programs, expert advisory services, carbon management initiatives, and bespoke on-site energy solutions. Furthermore, NRG actively engages in the trading of electric power, natural gas, and associated commodities, alongside environmental credits, weather-related products, and various financial instruments such as forwards, futures, options, and swaps. The company also manages fuel procurement and transportation services. It directly markets energy, services, and products to retail consumers through several established brands, including NRG, Reliant, Direct Energy, Green Mountain Energy, Stream, and XOOM Energy. As of December 31, 2021, NRG Energy's generation assets encompassed approximately 18,000 megawatts of capacity across 25 owned and leased facilities. The corporation was founded in 1989 and maintains its corporate headquarters in Houston, Texas.
- Sector
- Utilities
- Industry
- Independent Power Producers
- CEO
- Lawrence Stephen Coben