Is NRG a high-quality business?

AlphaMadera's AlphaQuality grade scores NRG Energy, Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how NRG compares to a Buffett-style quality bar.

What is NRG Energy, Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to NRG based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes NRG a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

NRG - NRG Energy, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $194.50 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

C- 48.8 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

D+ 42.6

5yr Avg ROIC 8.5% 53/100
Operating Margin Trend -1.05 pp/yr 19/100

Capital Efficiency

Weight: 15%

A+ 100.0

5yr Avg ROE 61.8% 100/100
5yr Share-Count CAGR -5.1% 100/100

Growth Quality

Weight: 25%

D 33.2

5yr Revenue CAGR 3.3% 47/100
5yr EPS CAGR -18.1% 0/100
Revenue-Growth Years (5) 3/5 60/100

Cash Generation

Weight: 20%

C- 45.3

5yr FCF Margin 1.4% 32/100
5yr FCF/NI Conversion 0.65x 62/100

Balance Sheet

Weight: 10%

D+ 42.9

Net Debt / EBITDA 2.59x 58/100
Interest Coverage (EBIT/Int) 2.40x 35/100
Altman Z-Score 1.39 25/100

Stability

Weight: 5%

D- 30.6

EPS Volatility (σ/μ) 0.88 5/100
Piotroski F-Score 4 44/100
Negative-Revenue Years (5) 2/5 60/100

6 of 6 gurus held; 3 added; 3 trimmed.

Holders: 6
Avg Δ position: +923.5%
New buys: 0
Full exits: 0

Cooperman increased +5614%
Wood decreased -83%
Dalio increased +55%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.