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Is Vistra Energy Corp. (VST) Stock Undervalued Right Now?

Zacks Equity Research
·3 min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Vistra Energy Corp. (VST) is a stock many investors are watching right now. VST is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock holds a P/E ratio of 6.60, while its industry has an average P/E of 15.21. Over the past 52 weeks, VST's Forward P/E has been as high as 11.82 and as low as 5.51, with a median of 10.14.

Another notable valuation metric for VST is its P/B ratio of 1.16. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.75. Within the past 52 weeks, VST's P/B has been as high as 1.73 and as low as 0.77, with a median of 1.38.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. VST has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.7.

Finally, investors will want to recognize that VST has a P/CF ratio of 3.48. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. VST's P/CF compares to its industry's average P/CF of 7.58. Over the past year, VST's P/CF has been as high as 5.64 and as low as 2.25, with a median of 4.33.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Vistra Energy Corp. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, VST feels like a great value stock at the moment.


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Zacks Investment Research