Vistra Stock Surges on Strong Q3 Earnings, Hyperscaler Ties

Vistra Corp. (NYSE: VST) shares surged on Thursday after the company reported strong third-quarter earnings and provided initial guidance for 2025. The Texas-based integrated retail electricity and power generation company also announced an additional $1 billion for its share repurchasing program. Vistra's Q3 results come along with several other nuclear-related companies reporting earnings on Thursday, as the sector has brushed off the rejected nuclear deal between Amazon.com (AMZN) and Talen Energy (TLN).

Vistra revenue totaled $6.29 billion, up 54% vs. Q3 2023. Earnings per share fell 24% to $1.24. Analyst consensus put Vistra Q3 EPS at $1.16 on revenue of $5.01 billion. Ongoing operations adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came in at $1.44 billion, in-line with expectations.

Vistra also raised its 2024 ongoing operations adjusted EBITDA target to $5.0 billion-$5.2 billion from $4.55 billion - $5.05 billion. The company initiated 2025 guidance, expecting adjusted EBITDA of $5.5 billion-$6.1 billion. Analysts put 2025 EBITDA at $5.76 billion.

Vistra's strong earnings and positive outlook can be attributed to its strategic partnerships with hyperscalers like Amazon and Microsoft. These collaborations have allowed Vistra to secure power purchase agreements (PPAs) for its new solar facilities, ensuring a steady revenue stream. By leveraging these partnerships, Vistra has been able to differentiate itself from competitors and capitalize on the growing demand for renewable energy from tech giants.



Vistra's comprehensive hedging program has also contributed to its strong Q3 earnings. As of September 30, 2024, Vistra had hedged approximately 100% of its expected generation volumes for the balance of 2024, 96% for 2025, and 64% for 2026. This strategy helped Vistra mitigate risks associated with commodity price fluctuations, ensuring a stable revenue stream. The company's hedging program, along with recent forward price curves, supported both its updated 2024 guidance ranges and the initiated 2025 guidance ranges, demonstrating the effectiveness of its risk management approach.



Vistra's acquisition of Energy Harbor also played a significant role in its Q3 financial performance. The addition of Energy Harbor drove a $1,335 million increase in Net Income compared to Q3 2023. Furthermore, the acquisition partially offset lower margins in Texas due to less summer scarcity pricing and higher retail supply costs, resulting in a $169 million decrease in Ongoing Operations Adjusted EBITDA compared to the same period last year.

Vistra's retail and generation segments both contributed to its strong Q3 earnings. The retail segment reported Adjusted EBITDA of $102 million, despite milder Texas weather compared to 2023. The generation segment, including the recently acquired Energy Harbor, generated Adjusted EBITDA of $1,342 million, driven by unrealized mark-to-market gains on derivative positions.

Vistra's recent Q3 earnings report showcases the company's strong performance and positive outlook. With a 54% year-over-year revenue increase and a 216% year-to-date stock surge, Vistra is well-positioned to capitalize on the growing demand for renewable energy from hyperscalers. As the company continues to expand its renewable energy portfolio and strengthen its ties with tech giants, investors can expect Vistra to remain a strong performer in the energy sector.