Anything left for NRG Energy in July?

In this story I am going to address all ongoing NRG Energy shareholders. I will look into why despite ongoing dip, the longer-term fundamental drivers of the firm are still sound. This firm current daily volatility is 1.38 percent, with beta of 0.0 and alpha of 0.0 over S&P 500. NRG Energy secures last-minute Real Value of $40.3267 per share. The latest price of the firm is $34.78. At this time the firm appears to be undervalued. Macroaxis forecasts value of NRG Energy from inspecting the firm fundamentals such as Profit Margin of 4.92% and Return On Equity of 77.26% as well as reviewing its technical indicators and Probability Of Bankruptcy. In general, we recommend to purchase undervalued stocks and to get rid of overvalued stocks since at some point future time entities prices and their ongoing real values will merge together.
Published over a year ago
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Reviewed by Ellen Johnson

The company has 7.09B in debt with debt to equity (D/E) ratio of 738.1 . This implies that the organisation may be unable to create cash to meet all of its financial commitments. NRG Energy dividends can provide a clue to current valuation of the stock. The firm one year expected dividend income is about $0.15 per share. The company has Net Profit Margin of 4.92 % which may imply that it executes well on its competitive polices and has a good control over its expenditures and variable costs. This is considered to be average in the sector. In the same way, it shows Net Operating Margin of 15.69 % which entails that for every 100 dollars of revenue it generated 0.16 of operating income.
NRG Energy financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of NRG Energy, including all of NRG Energy's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of NRG Energy assets, the company is considered highly leveraged. Understanding the composition and structure of overall NRG Energy debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding NRG Total Liabilities

NRG Energy liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. NRG Energy has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on NRG Energy balance sheet include debt obligations and money owed to different NRG Energy vendors, workers, and loan providers. Below is the chart of NRG short long-term liabilities accounts currently reported on its balance sheet.
You can use NRG Energy financial leverage analysis tool to get a better grip on understanding its financial position

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.

A Deeper Perspective

The big decline in price over the last few months for NRG Energymay encourage investors to take a closer look at the firm as it closed today at a share price of 34.22 on 2708694.000 in trading volume. The company executives failed to add value to investors and positioning the firm components to exploit market volatility in May. However, diversifying your holdings with NRG Energy or any similar stocks can still protect your portfolios during high-volatility market scenarios. The stock standard deviation of daily returns for 30 days (very short) investing horizon is currently 1.3784. The below-average Stock volatility is a good sign for a longer term investment options and for buy-and-hold investors. NRG Energy is selling for 34.78. This is 0.99 percent up. Day high is 34.88. NRG Energy Cash Flow Per Share is rather stable at the moment. Further, NRG Energy Tangible Asset Value is increasing over the last 4 years.
 2014 2015 2018 2019 (projected)
NRG Energy Long Term Debt to Equity 1.98  6.31  7.94  5.42 
NRG Energy Interest Coverage 1.12  0.29  2.26  1.97 
Taking everything into account, we believe that at this point NRG Energy is undervalued with close to average chance of distress within the next 2 years. Our current buy vs. sell advice on the firm is Strong Hold.

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Editorial Staff

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 Vlad Skutelnik 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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