NRG Energy reported a net income of $1,125 million for the year ended December 31, 2024, a significant recovery from a net loss of $202 million the previous year. Despite this positive turnaround, the company's stock saw a decline of 2.54% over the last quarter. This price movement occurred amidst several key corporate actions, including an ongoing share buyback program and an 8% increase in dividends. Additionally, broader market trends, such as a 1.9% market drop influenced by tech stock sell-offs and tariff concerns, likely played a role in this decline. While NRG undertook substantial share repurchases—7.62 million shares between October 2024 and January 2025—these actions were insufficient to offset the stock price decrease, possibly due to external market pressures and lower-than-expected sales figures, which dropped to $28,130 million from $28,823 million the prior year.

Take a closer look at NRG Energy's potential here.

Over the last five years, NRG Energy experienced a total return of 287.77%, reflecting a significant value increase, inclusive of dividends. This robust performance was propelled by key factors such as its favorable valuation, trading at a Price-To-Earnings Ratio of 18.5x, which is below both industry and peer averages. Another contributing factor was NRG's share buyback program, which resulted in 27.28 million shares repurchased for US$1.82 billion between November 2022 and January 2025, aiding in supporting shareholder value.

During the past year, NRG outperformed the broader US market and its industry with returns above 14% and 23.6% respectively. The company's financial metrics, including a high Return on Equity of over 40% (although affected by high debt levels), and its recent transition to profitability with a net income of US$1.13 billion in 2024, all played pivotal roles in enhancing its long-term shareholder returns.

• Unlock the insights behind NRG Energy's valuation and discover its true investment potential
• Uncover the uncertainties that could impact NRG Energy's future growth—read our risk evaluation here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include NYSE:NRG.

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