Vistra Corp. (VST): A Bull Case Theory

We came across a bullish thesis on Vistra Corp. on r/Valueinvesting by rogerm8. In this article, we will summarize the bulls’ thesis on VST. Vistra Corp.'s share was trading at $171.42 as of January 13th. VST’s trailing and forward P/E were 61.66 and 17.92 respectively according to Yahoo Finance.

Vistra presents a compelling energy investment opportunity following a roughly 20% pullback from its all-time high of $219, with the stock now trading in the $160 to $170 range. This decline has created an attractive entry point, especially given that analyst price targets remain constructive, ranging from $217 on the low end to $256 on the high end, with a mean target of $233 that implies nearly 40% upside from current levels.

While the trailing P/E appears elevated, this is largely distorted by a recent quarterly EPS miss driven by a non-operational accounting event rather than underlying business weakness. On a forward basis, valuation looks reasonable, particularly in light of strong year-on-year growth across revenue, net income, net profit margin, EBITDA, and annual EPS. The company’s return on capital of roughly 11% sits above industry averages, signaling effective reinvestment and solid long-term growth prospects.

Operationally, Vistra has been actively expanding its asset base through the acquisition of seven natural gas plants and continued investment in both gas and solar buildouts. A recently finalized 20-year power supply agreement, set to commence in 2027, adds long-duration revenue visibility, while partnerships with Amazon and Microsoft on solar projects further strengthen its positioning in serving large-scale, high-quality counterparties.

The broader macro backdrop is also supportive, as a lower interest rate environment should ease financing costs and improve the economics of ongoing and future buildouts. Structurally rising energy demand from electrification trends, including electric vehicles, data centers, and AI infrastructure, provides an additional tailwind from 2026 onward.

Institutional confidence appears to be building as well, highlighted by JPMorgan’s recent increase in its Vistra stake by 23% in Q3 2025 at prices close to current levels. From a technical perspective, the stock shows strong support around $166 and $160, with a broader base near $150, suggesting limited downside and an attractive risk-reward setup.

Previously, we covered a bullish thesis on Vistra Corp. (VST) by desperate-pleasures in March 2025, which highlighted the company’s positioning as an AI-driven power beneficiary, nuclear exposure, strong cash flow, and capital returns. The company’s stock price has appreciated by approximately 35.11% since our coverage. This is because the thesis played out as energy demand expectations strengthened. This is because Vistra’s fundamentals remained intact. rogerm8 shares a similar thesis but emphasizes valuation reset, institutional buying, and new long-term contracts.

Vistra Corp. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 112 hedge fund portfolios held VST at the end of the third quarter which was 111 in the previous quarter. While we acknowledge the potential of VST as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.