A month has gone by since the last earnings report for NRG Energy (NRG Quick QuoteNRG - Free Report) . Shares have added about 22.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is NRG due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

NRG Energy Q4 Earnings Beat Estimates, Revenues Lag

NRG Energy, Inc. reported fourth-quarter 2023 earnings of $1.14 per share, which beat the Zacks Consensus Estimate of 94 cents by 21.3%. The company reported earnings of $1.64 per share in the year-ago quarter.

In 2023, the company reported a GAAP loss of $1.12 per share against earnings of $5.17 in 2022.

Revenues

Total revenues came in at $6.81 billion, which missed the Zacks Consensus Estimate of $7.76 billion by 12.2%. The figure also declined 13.4% from $7.86 billion recorded in the prior-year quarter.

Total revenues for 2023 were $28.8 billion, down 8.6% from the prior-year level of $31.5 billion.

Highlights of the Release

The company recorded adjusted EBITDA of $844 million, up 82.3% from the year-ago quarter’s figure of $463 million.

The company’s total operating costs and expenses in 2023 were $30 billion, up 1.3% from $29.6 billion in 2022.

Operating income for 2023 totaled $384 million compared with $2.02 billion in 2022.

Financial Highlights

As of Dec 31, 2023, NRG had cash and cash equivalents worth $541 million compared with $430 million as of Dec 31, 2022.

As of Dec 31, 2023, long-term debt and finance leases amounted to $10.13 billion compared with $7.98 billion as of Dec 31, 2022.

Cash used by operating activities in 2023 totaled $221 million against $360 million cash provided in the previous year.

Capital expenditures totaled $598 million in 2023 compared with $367 million in the previous year.

Guidance

NRG Energy reaffirmed its 2024 guidance of $3.3-$3.55 billion for Adjusted EBITDA and $1.83-$2.1 billion for Free Cash Flow before Growth.

For 2024, the company reiterated its previously announced capital allocation plan that includes $500 million in debt paydown, $825 million in share repurchases and an 8% increase of the annual common dividend.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

The consensus estimate has shifted 52.81% due to these changes.

VGM Scores

Currently, NRG has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision looks promising. Notably, NRG has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

NRG is part of the Zacks Utility - Electric Power industry. Over the past month, PSEG (PEG Quick QuotePEG - Free Report) , a stock from the same industry, has gained 7%. The company reported its results for the quarter ended December 2023 more than a month ago.

PSEG reported revenues of $2.61 billion in the last reported quarter, representing a year-over-year change of -17%. EPS of $0.54 for the same period compares with $0.64 a year ago.

For the current quarter, PSEG is expected to post earnings of $1.26 per share, indicating a change of -9.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +6.4% over the last 30 days.

PSEG has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.