Vistra (VST)
Merchant generation plus retail plus nuclear at scale: 43.6 GW net capacity, FY2025 Ongoing Operations Adjusted EBITDA of $5,912M, Adj. FCFbG of $3,592M, and ~$47B market cap.
Educational analysis for professional use. This profile is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
Snapshot
The Integrated Merchant Benchmark
Vistra is the filed example of merchant generation wrapped in retail and selective nuclear power purchase agreements (PPAs). Capacity, EBITDA, Adj. FCFbG, and market cap sit in the header metrics; retail integration and nuclear baseload change the cash-flow mix relative to a pure gas-merchant book, and Vistra's cash metric is Adj. FCFbG rather than CAFD, the cash-available-for-distribution line yieldcos report.
The majority of the fleet operates as merchant facilities without long-term power sales agreements, per the annual report. Forward deck disclosure tells a different story: roughly half of expected 2026 Ongoing Operations Adjusted EBITDA comes from Retail plus long-term PPAs, including ~3.8 GW of nuclear under LT PPAs with AWS and Meta. Hedge share and PPA-contracted share are separate proxies, and Vistra's deck keeps them that way.
Business Overview
Vistra spans Texas retail, PJM and MISO generation, and a growing Vistra Zero renewables pipeline. Gas and coal still dominate MW, but nuclear provides baseload and capacity-market optionality in PJM. Development includes 777 MW of solar plus storage (571 MW solar, 206 MW storage), 860 MW Permian gas under construction, 433 MW of PJM nuclear uprates from January 2026, and ~5,500 MW Cogentrix pending M&A per the Feb 2026 deck.
Net debt was $18,499 million at 31 December 2025 (total debt $19,284 million less cash $785 million; $17,373 million after netting $1,126 million cash margin deposits). The company quotes 2.6× net debt on a $7,200 million 2026 Ongoing Operations EBITDA midpoint; computed FY2025 leverage is ~3.1× ($18,499M ÷ $5,912M). Use the 2026E company ratio for forward credit screens, FY2025 computed for trailing comps.
How the Economics Work
Merchant energy margin moves with hub prices; capacity revenue clears through auctions such as PJM's Base Residual Auction (BRA), with planning models using $250/MW-day while cleared auction results can diverge materially from that mark. Spark spread logic (gas heat rate versus hub energy plus capacity) drives gas plant margins; the spark spread guide walks through Henry Hub (HH) price times heat rate versus hub plus $/MW-day capacity. This profile uses the demonstration prices above in every worked example. They are teaching inputs rather than forecasts, so check current market prices when you build your own model.
Retail wraps a customer book around owned generation. It smooths volume risk and contributes to the ~half of 2026 EBITDA that comes from Retail plus LT PPAs. That integration is what the contracted premium guide means by cash-flow quality sitting above a pure-merchant book, even though most MW remain merchant on an asset basis.
Adjusted FCFbG is the C-corp cash metric here. At $3,592 million for FY2025 it sits below EBITDA after maintenance capex and working capital, and funds buybacks and dividends without yieldco-style payout ratio disclosure.
Valuation Framework
Computed EV/EBITDA on FY2025 figures was ~11.1× (enterprise value of roughly $65.4B, from market cap ~$46.9B plus net debt $18.5B, divided by $5,912M EBITDA), as of 10 June 2026. The contracted premium the primer teaches is a cash-flow-quality adjustment: retail and nuclear PPAs earn Vistra partial credit for contract quality without making it a yieldco.
Sum-of-the-parts thinking helps because consolidated EBITDA mixes regimes. Nuclear LT PPAs with hyperscalers trade like contracted baseload. Texas gas and coal still follow spark spreads and heat rates, while retail earnings hinge on customer counts and margin per MWh; a single multiple on the blended line obscures which regime is moving.
Key Risks
Most MW are merchant, so a move in PJM or ERCOT energy prices flows straight into Ongoing Operations EBITDA unless hedged.
Coal and gas transition. 20% coal and 62% gas by MW face environmental compliance and fuel-switching economics. Vistra Zero adds renewables, but the legacy fleet still sets marginal earnings sensitivity.
Proxy confusion. ~half 2026 EBITDA from Retail + LT PPAs is forward and illustrative, not a FY2025 filed split. Do not quote it as a historical contracted generation percentage.
Leverage timing. 2.6× is on 2026E EBITDA; 3.1× is FY2025 computed. Credit screens need the same denominator as the company guidance you cite.
What the Screening Shows
Against the Renewables and IPPs Sector Primer thresholds:
- Capacity: 43.6 GW net; nuclear 15%, gas 62%. Merchant-majority fleet with retail wrapper.
- Contract profile: No FY2025 filed split; forward ~half 2026 EBITDA Retail + LT PPAs; ~3.8 GW nuclear under LT PPAs.
- Cash metric: Adj. FCFbG $3,592M (not CAFD).
- Leverage: 2.6× (2026E company) / ~3.1× (FY2025 derived). Inside conservative-to-normal band on forward view.
Spark spread and capacity revenue still drive the gas/coal core. What could still shift here is more LT baseload offtake and more retail margin, not a flip to yieldco accounting; merchant MW still dominate the fleet even as retail and nuclear PPAs change the cash-flow mix.
Renewables & IPPs Sector Primer
A multi-period DCF splits contracted PPA years from the merchant tail, pricing each off realised power price and term, then checks the value against spark spread and CAFD.
The Excel model is the primer's two archetype builds live across 10 sheets: a multi-period DCF with a contracted-or-merchant toggle, step-down discount rates for the PPA term and the merchant tail, a spark-spread build for the merchant case and a CAFD-and-payout bridge for the yieldco. Change the realised PPA price, the contracted discount rate or the merchant spread and the value per share moves; the premium and payout sheets update alongside it. It also splits the contracted premium into the part the pipeline explains and the part contract quality explains, splits the PV between contracted years and the merchant tail, and reads EV per kW on both archetypes.