Should You Take a Fresh Look at Vistra After Its Massive 1,100% Rally?

If you’ve spent any time eyeing Vistra stock lately, you already know this name is turning heads. With a stellar track record over the past five years, up more than 1,100% since 2019, and sustained momentum in 2024, it’s hard not to wonder: Is there more room to run, or are we late to the party? In just the last three years, shares have soared over 900%, and even in the past month alone, the price is up nearly 10% as the market digests a series of new developments in the energy sector that appear to favor Vistra’s business model.

One thing is for certain: the recent 2.5% jump this past week is no fluke. Investors are recalibrating their views on Vistra’s long-term prospects and, more specifically, their appetite for risk in the power generation and retail energy space. Part of this surge ties back to ongoing shifts in energy infrastructure, with the market rewarding companies that are nimble and have strong positions as demand dynamics evolve. All of that brings us to the big question: At $206.55 a share after such an epic run, is Vistra still undervalued?

To answer that, I’ve run Vistra through six different valuation checks. On four out of six, the company comes out looking attractively undervalued, scoring a solid 4 on our value scale. Let’s dig into those valuation approaches and see what the numbers really say, before I reveal the one angle that’s even better for getting to the heart of value.

Vistra delivered 67.3% 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 estimates a company's intrinsic value by forecasting future free cash flows and then discounting those amounts back to the present using a required rate of return. This approach aims to tell investors what the business is truly worth today, based on its ability to generate cash in the years ahead.

For Vistra, the model starts with its latest twelve-month Free Cash Flow of $1.47 billion. Analysts anticipate robust growth, projecting that by 2029, annual free cash flows could reach as high as $5.88 billion. In addition, Simply Wall St’s extended forecasts put 2035’s cash flows at over $9 billion, although projections that far out rely more heavily on modeled growth rates than on firm analyst estimates.

After discounting future cash flows to account for time and risk, the DCF model arrives at an intrinsic value per share of $408.18. At today’s share price of $206.55, this implies Vistra is trading at a 49.4% discount to its estimated intrinsic value. By this measure, the stock appears significantly undervalued.

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 49.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Vistra Price vs Earnings

When analyzing a profitable company like Vistra, the Price-to-Earnings (PE) ratio offers a straightforward way to assess valuation. This metric tells investors how much they are paying for each dollar of current earnings, making it especially useful for businesses that consistently generate profits. The “right” PE ratio for a stock depends on several factors, including the company’s expected growth trajectory and its risk profile. Faster-growing or lower-risk firms typically warrant higher PE ratios.

Currently, Vistra trades at a PE ratio of 31.87x. For context, this is below the average PE of its direct peers at 38.85x and significantly higher than the broader Renewable Energy industry average of 15.85x. These numbers suggest Vistra is trading at a premium to the industry as a whole, but at a discount to its main peer group, which points to nuanced market expectations about growth and risk.

To cut through these comparisons, Simply Wall St applies a proprietary “Fair Ratio,” which estimates the PE multiple Vistra deserves given its unique blend of earnings growth, profit margins, market capitalization, and risk factors. The Fair Ratio for Vistra stands at 41.35x. This method is considered more comprehensive than simple peer or industry benchmarks because it captures the full picture, including company-specific drivers that traditional averages may miss.

With Vistra’s actual PE ratio of 31.87x sitting well below its Fair Ratio of 41.35x, the stock appears attractively undervalued on this basis.

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's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, accessible way to connect your story about Vistra, why you think it will win or face challenges, to your financial forecasts and, ultimately, to what you believe is a fair value for the stock. Narratives bring numbers to life, helping you link the company’s evolving business, your assumptions on future revenue, earnings, and margins, and arrive at your best estimate of what the shares should actually be worth.

This approach is easy to use and available right within Simply Wall St’s Community page, where millions of investors share their perspectives. Narratives keep investment decisions grounded and dynamic by showing you at a glance if your Fair Value supports buying, holding, or selling Vistra at today’s price. Plus, they are updated in real time as new information, like news or earnings updates, rolls in, so your Narrative adapts alongside the company and the market.

For example, some investors see Vistra’s aggressive expansion into grid-scale storage and long-term contracts as major growth levers and arrive at bullish fair values near $261, while others worry about regulatory risk or high leverage and estimate fair values as low as $164. This reminds us that these competing stories are what drive every market price.

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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