Does Vistra’s Recent 66% Surge Signal More Room for Growth in 2025?

If you’ve been watching Vistra lately or considering whether now is the right moment to invest, you’re far from alone. The conversation around this utility stock has heated up, and for good reason. Over the past year, Vistra has delivered an eye-popping return of 66.3%. If you zoom out further, the numbers are even more staggering: up 927.9% over three years and 1134.9% over five years. While the short-term movements have been steadier, with a 0.2% gain in the last week and 0.5% for the month, there is a clear narrative of long-term momentum at play.

These kinds of returns do not go unnoticed, and they typically spark a lot of debate about whether a stock has gotten ahead of itself, still holds promise, or is suddenly taking on more risk. In Vistra’s case, much of the recent optimism draws from shifting market dynamics in the power generation and retail electricity sector, where companies like Vistra are finding new opportunities amid evolving energy trends. Investors are now weighing how much of this potential is already reflected in the current price.

Here is where things get interesting: according to our valuation framework, Vistra is showing as undervalued in four out of six different checks, giving it a value score of 4. This isn’t just about past performance; it is a strong signal that the fundamentals may still be lagging the headline-grabbing returns.

In the next section, we will break down each of these valuation approaches and what they reveal about Vistra today. Plus, there is an even more insightful way to assess the company’s true worth waiting for you at the end of the article.

Vistra delivered 66.3% returns over the last year. See how this stacks up to the rest of the Renewable Energy industry.

Approach 1: Vistra Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model projects a company’s expected future cash flows and discounts them back to today’s value using a discount rate. This approach helps estimate what a business is intrinsically worth based on how much cash it is expected to generate in the future.

For Vistra, the current Free Cash Flow stands at $1.47 billion. Analysts have built this estimate using the 2 Stage Free Cash Flow to Equity model, where the next five years of forecasts are supported by analyst inputs and the following years are extrapolated based on projected growth. By 2029, Vistra’s Free Cash Flow is expected to reach about $6.0 billion. Over the next decade, FCF projections continue to climb, signaling robust expectations for the business’s earnings power.

This DCF calculation implies an intrinsic fair value of $419.52 per share. Compared to the current share price, Vistra is estimated to be trading at a 49.8% discount, which suggests it is significantly undervalued according to this model.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Vistra.

Our Discounted Cash Flow (DCF) analysis suggests Vistra is undervalued by 49.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Vistra Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a widely used valuation metric for profitable companies because it connects a company's market value directly to its earnings. For investors, it provides a quick snapshot of how much they are paying for each dollar of earnings, making it particularly useful for assessing businesses where profits are reliable and growing.

Growth expectations and risk play a key role in determining what counts as a “normal” or “fair” PE ratio. Generally, higher growth companies justify higher PE multiples, while those with slower growth or greater risks tend to command lower multiples. It is essential to consider not just raw earnings, but also future prospects and competitive pressures when interpreting these ratios.

Currently, Vistra trades at a PE ratio of 32.5x. This is below its peer group average of 37.2x but well above the broader Renewable Energy industry average of 16.7x. While these benchmarks offer helpful context, they do not always tell the whole story.

This is where Simply Wall St’s proprietary “Fair Ratio” comes in. The Fair Ratio, which is currently 41.0x for Vistra, takes into account not only industry and peer multiples but also company-specific growth rates, profit margins, risks, and market capitalization. This gives investors a more tailored benchmark that reflects Vistra’s own strengths and challenges rather than relying solely on broad or generic comparisons.

By comparing the Fair Ratio of 41.0x to Vistra’s actual PE of 32.5x, the stock appears to be undervalued on this metric, indicating there may still be further upside if the company maintains its current momentum.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Vistra Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives: a tool that makes sense of the numbers by putting your perspective on a company’s future at the heart of investment decisions.

A Narrative is simply your story about a company. It is the way you connect what is happening in the real world to your own forecasts for future revenue, earnings, and margins, and from there, estimate what the business is truly worth. Instead of just focusing on a single price target or isolated metrics, writing a Narrative helps you tie Vistra’s strategy, risks, and opportunities to a dynamic financial forecast and an actionable fair value.

Narratives are easy to use and available right now within Simply Wall St’s Community page, where millions of investors build and update their views. They make buy or sell decisions clearer by comparing your Fair Value to Vistra's current share price. Plus, whenever the market changes or fresh company news lands, your Narrative can update with the latest data and insights, keeping your investment thesis current.

For example, some Vistra Narratives forecast a bullish path, citing booming electricity demand from AI and data centers, projecting earnings as high as $3.4 billion by 2028 and a fair value of $261.0. Others see more risk, pointing to regulatory and market headwinds, projecting as low as $2.6 billion in earnings and a conservative fair value of $164.53. Your Narrative empowers you to decide which view aligns with your beliefs and the latest facts.

Do you think there's more to the story for Vistra? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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