NRG Energy to Report Q3 Earnings: How to Play the Stock?

NRG Energy NRG is scheduled to release its third-quarter 2025 results on Nov. 6, before market open. The Zacks Consensus Estimate for earnings is currently pegged at $2.26 per share on revenues of $7.16 billion.Third-quarter earnings estimates have moved up by 23.50% over the past 60 days. The bottom-line projection indicates an increase of 22.16% from the year-ago number. The Zacks Consensus Estimate for quarterly revenues indicates a year-over-year decline of 0.90%.Image Source: Zacks Investment ResearchNRG Stock’s Earnings Surprise HistoryNRG Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one quarter, with the average surprise of 26.22%. Image Source: Zacks Investment ResearchWhat the Zacks Model UnveilsOur proven model does not predict an earnings beat for NRG Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you can see below.NRG Energy, Inc. Price and EPS Surprise NRG Energy, Inc. price-eps-surprise | NRG Energy, Inc. QuoteYou can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.NRG’s Earnings ESP: NRG Energy has an Earnings ESP of 0.00%.Zacks Rank of NRG: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.Some companies in the same sector with the right combination of the two factors for an earnings surprise this season are Duke Energy Corporation DUK, having an Earnings ESP of +1.63% and a Zacks Rank #2, and Alliant Energy Corporation LNT, having an Earnings ESP of +0.43% and Zacks Rank of 3.Factors Likely to Have Shaped NRG Stock’s Q3 EarningsNRG served a diverse customer base, with no single customer accounting for more than 10% of its total revenues. Courtesy to its high-quality services, the company has maintained strong customer retention, which ensures steady revenues and is likely to have a positive impact on third-quarter earnings.NRG Energy has been expanding operations through strategic acquisitions and the contributions coming in from the acquired assets are likely to have boosted third-quarter earnings. The company has also been gaining from the increasing demand for reliable, clean power from data centers.Free cash flow generation capacity allows the company to continue to buy back its shares, which reduces the outstanding share volume and has a positive impact on the bottom line.NRG Stock’s Price PerformanceNRG’s shares have gained 44.6% in the past six months compared with the Zacks Utility – Electric Power industry’s rise of 7.6%.Image Source: Zacks Investment ResearchNRG Stock Returns Better Than Its IndustryNRG Energy’s trailing 12-month return on equity (“ROE”) is 88.22%, ahead of the industry average of 10.35%. ROE is a financial ratio that measures how well a company uses its shareholders’ equity to generate profits. The company's current ROE indicates that it is using shareholders’ funds more efficiently than peers.Image Source: Zacks Investment ResearchNRG Energy’s Shares Trading at a PremiumThe company is currently valued at a premium compared with its industry on a forward 12-month P/E basis. NRG Energy is trading at 18.24X compared with its industry’s 15.3X.Image Source: Zacks Investment ResearchInvestment ThesisNRG Energy has made notable strides in its transformation into an integrated power company by prioritizing customer-centric strategies. Its strong performance has been driven in part by organic growth initiatives.The company has been trying to slowly lower the proportion of debt in the capital mix for a while. NRG Energy is targeting $3.7 billion debt reduction over 24-36 months from closing to maintain investment-grade credit metrics. This will lower capital servicing expenses and boost the margins of the company.Rapid expansion of Artificial Intelligence-driven data centers in NRG Energy’s service region is creating fresh opportunities for it over the long term. NRG Energy, with its clean energy generation capacity, will be able to cater to the rising demand from data centers and benefit from the same.Rounding UpNRG Energy is expected to benefit from stable demand coming from its diverse customer base and the rising demand from data centers will act as a further tailwind.The company will gain from the contribution coming in from its organic and inorganic assets, the debt reduction initiatives and buyback of shares will continue to have a positive impact on its earnings.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NRG Energy, Inc. (NRG): Free Stock Analysis Report Duke Energy Corporation (DUK): Free Stock Analysis Report Alliant Energy Corporation (LNT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks