Is It Time To Buy NRG Energy Inc (NRG)?
NRG Energy Inc (NYSE:NRG), a independent power and renewable electricity producers company based in United States, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $26.62 and falling to the lows of $22.93. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether NRG’s current trading price of $24.77 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at NRG’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for NRG
What’s the opportunity in NRG?
Good news, investors! NRG is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $35.74, but it is currently trading at $24.77 on the share market, meaning that there is still an opportunity to buy now. However, given that NRG’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will NRG generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at NRG future expectations. However, with a relatively muted revenue growth of 4.58% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for NRG, at least in the short term.
What this means for you:
Are you a shareholder? Since NRG is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on NRG for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy NRG. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on NRG Energy. You can find everything you need to know about NRG in the latest infographic research report. If you are no longer interested in NRG Energy, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
