Valero Energy Corporation (VLO)
Quantitative Summary
DeterministicAt 17.9x earnings — a 49% discount to the sector average of 34.8x — VLO is in the lower valuation range. Financial health is average: Piotroski 6/9, Altman Z 5.0. DCF fair value of $97 implies 60% downside based on model assumptions.
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedValero Energy Corporation exhibits a fundamental profile characterized by significant capital efficiency challenges, as evidenced by an ROIC of 6.4% that trails its weighted average cost of capital (WACC) at 8.8%, resulting in a negative spread of -2.4%. This value destruction is compounded by weak profitability metrics, with a net margin of just 1.9% and a Profitability Factor alpha of -0.152, indicating the market perceives deteriorating returns on operations despite an Asset Turnover ratio exceeding two times. While the Piotroski F-Score of 6/9 suggests moderate financial strength and the Altman Z-Score of 5.0 indicates a safe distance from bankruptcy distress, these defensive scores are overshadowed by negative revenue growth of -5.5% YoY, creating a tension between solvency and value creation that is further flagged by a weak profitability signal in factor models.
The current valuation structure presents a substantial disconnect between market pricing and intrinsic worth derived from discounted cash flow analysis. Trading at 32.2x earnings, the stock commands a premium of over eight times relative to its sector average of 24.0x, yet this multiple implies an aggressive long-term free cash flow growth rate of 11.4% that appears inconsistent with current operational headwinds. A DCF model incorporating these assumptions assigns a fair value significantly below the trading price, implying approximately -65.2% downside to reach equilibrium levels. This valuation gap suggests the market is pricing in future recovery scenarios that may not be immediately supported by the company's recent top-line contraction and margin compression.
Risk assessment reveals conflicting signals between momentum factors and insider behavior. Although the stock displays a strong Value Factor tilt with an HML score of 1.044, suggesting potential mean reversion benefits for value-oriented strategies, this is counterbalanced by notable insider selling totaling nearly $2 million over the last ninety days. Such net outflows from management or major shareholders often precede downward revisions in guidance or reflect a lack of confidence near current price levels. Consequently, while the stock offers exposure to a historically undervalued sector via its value factor profile, the combination of negative capital generation relative to cost, weak profitability trends, and active insider distribution warrants caution regarding immediate entry points until fundamental drivers align with higher growth expectations.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of -6% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 6.1% | 8.1% | 10.1% |
|---|---|---|---|
| 2% | $126 | $84 | $62 |
| 3% | $162 | $97 | $69 |
| 4% | $232 | $117 | $78 |
Center = base case. Green = >10% upside, Red = >10% downside vs $258.26.
Pre-computed DCF: WACC=8.1%, terminal growth 3%. Fair value $97 (-59.8%). Not investment advice.
Valuation Context
Currently trading 38% below its 5-year average P/E of 50.9x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedValero Energy (VLO) is currently trading well above both its 50-day and 200-day moving averages, indicating strong upward price momentum over recent months. The RSI reading of 73.5 suggests that the stock may be approaching an overbought condition, implying potential near-term volatility or a pullback as buyers might start to take profits.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Insider Activity (Last 90 Days)
Open-market buys vs sells by company insiders. Source: yfinance.
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-05-21 | $1.2000 | 0.0% |
| 2026-02-05 | $1.2000 | +6.2% |
| 2025-11-20 | $1.1300 | 0.0% |
| 2025-07-31 | $1.1300 | 0.0% |
| 2025-05-20 | $1.1300 | 0.0% |
| 2025-01-30 | $1.1300 | +5.6% |
| 2024-11-20 | $1.0700 | 0.0% |
| 2024-08-01 | $1.0700 | 0.0% |
| 2024-05-30 | $1.0700 | 0.0% |
| 2024-01-31 | $1.0700 | +4.9% |
| 2023-11-16 | $1.0200 | 0.0% |
| 2023-08-02 | $1.0200 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLE or IYE, the fund manager is mechanically forced to buy or sell VLO shares regardless of Valero Energy Corporation's individual fundamentals. We estimate $14.1B of passive capital is structurally linked to VLO through 8 tracked ETFs. This substantial passive exposure means that ETF inflows and outflows — not company fundamentals — can dominate daily volume on this stock.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in Valero Energy Corporation to visualize passive redemption contagion across ETFs and collateral stocks.
If Valero Energy Corporation (VLO) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies EXXON MOBIL CORP (XOM) as the most exposed collateral stock, sharing 2 ETFs with VLO. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 35 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
VLO Ownership Dynamics
Passive funds hold 1 in every 5 VLO shares, reducing daily market volatility.
Valero Energy Corporation (VLO) exerts notable gravity on the passive index market, currently representing 4.0% of the State Street Energy Select Sector SPDR ETF (XLE) and 3.5% of the IYE (IYE). Across 33 tracked ETFs, approximately 62M shares (20.7% of float) are held by passive funds and rarely trade on the open market. This high passive lock-up reduces the effective active float, which can amplify daily price volatility and momentum signals.
ETFs with Highest VLO Exposure
Float lock-up computed from 33 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
VLO Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for Valero Energy Corporation over the past year sits near $161.39 (10% of 252-day volume). The current price of $258.26 trades 60.0% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
VLO Capital Efficiency
How efficiently does Valero Energy Corporation convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
Valero Energy Corporation converts 75% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. However, the ROIC-WACC spread is negative (-1.7%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-14 | 2 | $244.10 | $488.2 |
| 2026-05-04 | 2,000 | $246.87 | $493,740 |
| 2026-05-01 | 3 | $252.58 | $757.74 |
| 2026-04-15 | 3 | $235.58 | $706.74 |
| 2026-04-14 | 14,675 | $242.08 | $3.6M |
| 2026-04-13 | 38,454 | $238.82 | $9.2M |
| 2026-04-10 | 3,202 | $235.10 | $752,790.2 |
| 2026-04-09 | 6,545 | $239.64 | $1.6M |
| 2026-04-07 | 2,097 | $245.58 | $514,981.26 |
| 2026-04-06 | 2,528 | $244.09 | $617,059.52 |
| 2026-04-02 | 4,715 | $241.46 | $1.1M |
| 2026-04-01 | 4,181 | $247.08 | $1.0M |
| 2026-03-31 | 24 | $250.27 | $6,006.48 |
| 2026-03-30 | 2,175 | $254.32 | $553,146 |
| 2026-03-27 | 479 | $248.14 | $118,859.06 |
| 2026-03-26 | 1,081 | $234.54 | $253,537.74 |
| 2026-03-25 | 10,544 | $241.75 | $2.5M |
| 2026-03-24 | 2,706 | $237.39 | $642,377.34 |
| 2026-03-23 | 9,246 | $239.86 | $2.2M |
| 2026-03-20 | 1,165 | $242.07 | $282,011.55 |
| 2026-03-19 | 18 | $238.46 | $4,292.28 |
| 2026-03-18 | 3,101 | $235.96 | $731,711.96 |
| 2026-03-17 | 3,033 | $232.57 | $705,384.81 |
| 2026-03-16 | 2,256 | $230.59 | $520,211.04 |
| 2026-03-13 | 4,172 | $235.81 | $983,799.32 |
| 2026-03-12 | 6,361 | $231.05 | $1.5M |
| 2026-03-11 | 20 | $217.02 | $4,340.4 |
| 2026-03-10 | 25 | $215.95 | $5,398.75 |
| 2026-03-09 | 8,615 | $224.63 | $1.9M |
| 2026-03-06 | 15,726 | $228.03 | $3.6M |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
SEC Comment Letters
SEC correspondence with the company regarding their filings. Comment letters often flag disclosure deficiencies, accounting concerns, or material omissions.
Source: SEC EDGAR correspondence. Comment letters are public records of SEC staff review of company filings.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| MPC | 0.849 | 0.844 | High co-movement |
| PSX | 0.823 | 0.806 | High co-movement |
| CVX | 0.579 | 0.565 | Moderate |
| COP | 0.571 | 0.567 | Moderate |
| PTEN | 0.564 | 0.585 | Moderate |
| EOG | 0.533 | 0.547 | Moderate |
| XOM | 0.528 | 0.521 | Moderate |
| APA | 0.522 | 0.545 | Moderate |
| MUR | 0.517 | 0.482 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare VLO to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.