Vistra Corp.

Based on a comprehensive analysis of VST, I would cautiously recommend the stock as a Buy for investors with a higher risk tolerance and a focus on growth potential.

VST demonstrates compelling fundamental strength, with impressive sequential quarterly revenue and profitability improvements. Operational efficiency is solid, though the company's high debt levels and low immediate liquidity are notable concerns that require careful monitoring. The most persuasive argument for investment lies in its valuation, where the remarkably low PEG ratio of 0.22 suggests the stock is undervalued relative to its expected earnings growth.

However, this opportunity comes with significant volatility, as evidenced by the high beta and history of sharp drawdowns. Investors willing to accept this risk are likely betting on the company's ability to sustain its recent operational momentum and justify its premium multiples through continued strong execution. Please be aware that this is not investment advice, for reference only.

RockFlow Model Forecast: Three Scenarios for 2026

Based on an analysis of the provided data, the 12-month outlook for VST is one of high-risk, high-reward potential.

Key catalysts will be the company's ability to sustain its recent operational momentum, translating improved revenue and profitability into stronger cash flow to address its high debt and liquidity concerns. The primary driver for the stock will be its execution against growth expectations implied by its remarkably low PEG ratio.

Potential risks are significant and include the company's substantial debt burden, low liquidity, and a historically high beta, which suggests the stock will be highly sensitive to market volatility and prone to sharp price swings.

Given the absence of a consensus analyst target, a cautious target price range would be highly speculative; the outlook hinges entirely on whether the company's growth can materially outpace its substantial financial risks. Success would likely push the price meaningfully higher, while any stumbles could lead to severe underperformance.

Wall Street Consensus

Most Wall Street analysts are optimistic about Vistra Corp.'s 12-month outlook, with consensus target around $172.50, indicating expected upside potential.

Overall, VST has investment potential but also faces challenges. Here are key factors to weigh before investing.

VST has demonstrated strong momentum from its 52-week lows but faces mixed intermediate performance with recent underperformance versus the market.

The stock has shown robust short-term appreciation with a 10.01% gain over one month, though its three-month performance remains relatively flat at +0.55%, underperforming the broader market by 1.3% over that period, indicating recent momentum may not be fully supported by relative strength. Given its beta of 1.443, VST exhibits higher volatility than the market.

Currently trading at $172.50, VST sits approximately 90% above its 52-week low but about 22% below its 52-week high, positioning it in the upper-middle portion of its yearly range; while not at extreme overbought levels, the significant rally from lows and substantial maximum drawdown of -39.9% over the past year warrant caution regarding potential volatility.

Revenue & Profitability VST demonstrated strong sequential improvement in Q3 2025, with revenue growing 17% quarter-over-quarter to $4.97 billion. Profitability metrics improved significantly, with net margin expanding from 7.7% to 13.1% as operating leverage benefited from higher revenue. The company's EBITDA margin also expanded substantially from 26.3% to 37.6%, indicating strong operational performance during the quarter.

Financial Health The company maintains a debt-heavy capital structure with a debt-to-equity ratio of 3.36 and total debt to capitalization of 77.1%. While the interest coverage ratio of 3.64 provides adequate earnings protection, the cash ratio of just 0.07 indicates limited immediate liquidity. The current ratio below 1.0 suggests potential working capital constraints that warrant monitoring.

Operational Efficiency VST generated a solid return on equity of 12.5%, supported by an asset turnover of 0.13 and an equity multiplier of 7.3. The operating cycle of 67 days and cash conversion cycle of 32 days demonstrate reasonable working capital management. However, the low fixed asset turnover of 0.28 suggests the company operates in a capital-intensive business model.

VST's current valuation presents a mixed picture. While its TTM PE ratio of 48.12 appears high for a traditional valuation, the significantly lower forward PE of 25.53 suggests strong earnings growth expectations for the coming year. The extremely attractive PEG ratio of 0.22, which is well below 1.0, strongly indicates that the stock may be undervalued relative to its growth prospects, as this metric factors in the company's earnings growth rate.

Without industry average data for comparison, a conclusive peer assessment cannot be made. However, the elevated PB ratio of 11.07 and EV/EBITDA of 44.71 suggest VST commands a premium multiple on both book value and operating cash flow. This typically indicates the market values the company's assets and operational efficiency highly, though the degree of premium or discount relative to sector peers remains unclear without benchmark data.

Volatility Risk: With a beta of 1.443, VST exhibits significantly higher volatility than the broader market, being approximately 44% more sensitive to market swings. This elevated sensitivity is further evidenced by a substantial 1-year maximum drawdown of -39.9%, indicating a high potential for significant capital depreciation during adverse market conditions.

Other Risks: The absence of reported short interest suggests that bearish sentiment is not a prominent concern for the stock. However, as a small-cap company, the primary risks are likely concentrated in liquidity constraints and company-specific operational factors, which could lead to outsized price movements on relatively low trading volumes.