Can VST's Free Cash Flow Thrust It Toward Further Long-Term Growth?

Vistra Corp. VST, an integrated retail electricity company, is a strong player in the evolving energy landscape. The company benefits from its wide-scale operation, geographic diversity and ability to generate free cash flow.

Vistra’s strength lies in the ability to generate robust free cash flow, courtesy of its efficient operations and disciplined cost management. The company allocates this cash to strengthen its balance sheet, ensuring financial flexibility and resilience in a capital-intensive industry. This strategy allows Vistra to maintain investment-grade credit quality while enhancing shareholders’ value.

In 2024, Vistra delivered adjusted free cash flow before growth of $2.88 billion and expects to generate adjusted free cash flow before growth in the range of $3 billion to $3.6 billion in 2025. Vistra is also deploying its free cash flow to fund growth initiatives, particularly in renewable energy and battery storage.

VST, through the free cash flow, has prioritized shareholder returns through dividends and share repurchases, reflecting its balanced capital allocation framework. As of Aug. 2, 2025, Vistra has executed $5.4 billion in share repurchases since November 2021. Vistra had 339 million shares outstanding, representing a 30% reduction of the amount as of Nov. 2, 2021, and $1.4 billion of the share repurchase authorization remains available, which it expects to complete by the end of 2026.

By reducing debt, investing in growth projects and rewarding shareholders, the company creates sustainable value. With its strong free cash flow generation and disciplined use of capital, Vistra is well-positioned to deliver consistent growth while transitioning toward clean energy generation.

Utilities Benefit From Free Cash Flow

Free cash flow provides utilities the financial flexibility to lower debt, upgrade infrastructure and accelerate renewable energy investments. This prudent reinvestment enhances efficiency, fuels long-term expansion and drives sustainable value creation for both the business and its shareholders.

Companies like Duke Energy DUK and NextEra Energy NEE benefit from their strong free cash flow. Duke Energy utilizes free cash flow to upgrade grid infrastructure and advance cleaner energy initiatives, while NextEra channels its cash flow into renewable expansion and capacity increase, ensuring sustainable growth and enhancing shareholder value.

VST Stock’s Price Performance

Vistra stock has gained 73.3% in the past six months compared with the Zacks Utility Electric Power industry’s rise of 6%.

VST Stock’s ROE Is Higher Than Its Industry

Vistra’s trailing 12-month return on equity (“ROE”) is 108.41%, way ahead of its industry average of 10.34%. ROE, a profitability measure, indicates how effectively a company is utilizing its shareholders’ funds in operations to generate income.

VST’s Earnings Estimate

The Zacks Consensus Estimate for 2025 earnings per share indicates a decline of 2.33% in the past 60 days, while the same for 2026 earnings implies an increase of 4.64% in the same time frame.

VST’s Zacks Rank

The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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