Vistra Stock Plunges Despite Growing Power Demand

Vistra's stock has fallen nearly 37% from its 52-week high of $219.82, to around $139 as of this writing. Despite this decline, the company continues to report strong results, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rising by about 31% year over year in the second quarter.

Management has reaffirmed its guidance for 2026 EBITDA of $6.8 billion to $7.6 billion and expects to hit or exceed the midpoint of this range. The company's cash generation is substantial, with a guided adjusted free-cash-flow yield of around 9% against a market capitalization of about $47 billion.

Vistra has also secured long-term power purchase agreements with tech giants Amazon and Meta Platforms, which should provide revenue visibility for the next two decades. The company's stock price may be attractive at its current level, considering the forward price-to-earnings ratio is around 13 and much of the future business is already contracted.

However, there are risks associated with Vistra's business model, including power prices that no one controls and a slowdown in data center construction. The company's net income was also weighed down by unrealized losses on hedging positions in the second quarter.