Has Vistra’s 659% Surge Already Priced In Its Future Growth Potential?

• If you are wondering whether Vistra is still a smart buy after its huge run, or if the stock has already done the heavy lifting for you, this article will walk through what the numbers are really saying about its value today.
• Vistra's share price has climbed 5.2% over the last week and is up 15.9% year to date, capping a massive 659.4% gain over 3 years and 962.3% over 5 years that has certainly reset market expectations.
• Those moves have come as investors have refocused on the strategic value of Vistra's generation fleet and its positioning in the evolving US power market, especially with growing attention on grid reliability and data center demand. At the same time, policy and regulatory shifts around the energy transition have kept the story in the headlines, feeding both enthusiasm and caution.
• Despite that backdrop, Vistra only scores 2 out of 6 on our valuation checks. This suggests the market may be paying up in some areas while overlooking value in others. Next, we will unpack what different valuation approaches say about the stock, and then finish with a more holistic way to judge whether the current price really makes sense.

Vistra scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Vistra Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting all the cash it can return to shareholders in the future, then discounting those cash flows back to today in dollar terms. For Vistra, the model used is a 2 Stage Free Cash Flow to Equity approach, starting from last twelve months free cash flow of about $1.31 billion.

Analysts expect Vistra's free cash flow to rise to roughly $3.72 billion in 2026 and $4.54 billion in 2027, with further growth to around $5.39 billion in 2028 and $5.96 billion by 2029. Beyond those analyst estimates, Simply Wall St extrapolates cash flows out to 2035, gradually slowing the growth rate as the company matures.

When all those projected cash flows are discounted back to today, the model produces an intrinsic value of about $373.97 per share. Compared with the current market price, that implies Vistra is trading at a 53.6% discount to its estimated fair value, which indicates the stock may still appear materially undervalued even after its large run.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Vistra is undervalued by 53.6%. Track this in your watchlist or portfolio, or discover 914 more undervalued stocks based on cash flows.

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

Approach 2: Vistra Price vs Earnings

For a profitable company like Vistra, the price to earnings ratio is a useful shorthand for how much investors are willing to pay for each dollar of current earnings. A higher PE can be justified when the market expects stronger, more reliable growth, while companies with slower growth or higher risk typically trade on lower, more conservative multiples.

Vistra currently trades on a PE of about 61.22x, which is well above both the Renewable Energy industry average of roughly 16.61x and the broader peer group average of around 30.32x. To go beyond these blunt comparisons, Simply Wall St uses a proprietary Fair Ratio, which estimates what a reasonable PE should be once you factor in the company’s earnings growth profile, industry, profit margins, market value and risk characteristics.

This Fair Ratio for Vistra is 47.41x, notably lower than the current market multiple. Because it adjusts for growth and risk, it is a more tailored benchmark than simple peer or industry averages. Comparing the two, Vistra’s actual PE sits meaningfully above its Fair Ratio, suggesting the market is paying a premium that is hard to justify on fundamentals alone.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1461 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 simple way to connect your view of Vistra’s story with concrete forecasts for its future revenue, earnings and margins, and then translate that into a Fair Value you can compare to today’s price.

On Simply Wall St’s Community page, Narratives let millions of investors spell out why they think a company will win or struggle, link that story to a full financial forecast, and then automatically see whether their Fair Value suggests the stock is a buy, hold, or sell at the current market price.

Because Narratives update dynamically when new information hits the market, such as earnings or major contract announcements, they give you a living valuation framework. For example, a bullish Vistra Narrative might assume stronger long term power demand and justify a Fair Value closer to the top end of analyst targets around $261. In contrast, a more cautious Narrative could emphasize regulatory and execution risks and land nearer the low end around $164.53. This can help each investor decide whether the current price offers enough upside for their own thesis.

Do you think there's more to the story for Vistra? Head over to our Community to see what others are saying!

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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