NRG

NRG is a competitive power and retail-energy operator serving ~8M residential customers with ~12 GW of generation concentrated in Texas. The top line is healthy: FY2025 revenue rose 9.4% to $30.3B, helped by a 51% jump in Henry Hub gas to $3.43/MMBtu and sharply higher on-peak power prices across nearly every market (ERCOT-Houston +19%, PJM West Hub +47%, NEPOOL +62%). The strategic story is also attractive — management cites ERCOT peak demand forecast to climb from 86 GW (2024) to 139 GW (2030) and up to 500 TWh of incremental U.S. load through 2030 from manufacturing and data-center/GenAI demand, directly into NRG's home market.

The earnings quality, however, is deteriorating. Despite higher revenue, FY2025 net income fell 23.2% to $864M, operating income dropped 23.9% to $1.84B, and diluted EPS fell 19.6% to $4.01. Margins are razor-thin (operating 6.1%, net 2.8%), and the MD&A flags exactly why results lag the favorable price environment: rapid commodity-price moves hit gross margins because NRG can only re-price term and month-to-month retail contracts on a lag. Earnings are also historically volatile — the company swung from $2.19B net income (2021) to a $202M loss (2023).