Vato is a common slang term in Mexican Spanish, particularly in northern Mexico and among Mexican-Americans, meaning 'guy' or 'dude'. It's an informal but widely understood word.
In the song "NO HAY VATO PERFECTO" (There's No Perfect Guy), the title itself features this word, making it central to the song's message. The singer uses it to refer to the new man his ex-partner is with, emphasizing the idea that no man is flawless, especially compared to him.
This song is a classic post-breakup message to an ex. The singer is feeling a mix of regret, jealousy, and a little bit of arrogance. He's convinced his ex is making a huge mistake, telling her, "Baby, tú estás durmiendo en la cama equivocada" (Baby, you're sleeping in the wrong bed). He's hurt seeing her with a guy she once dismissed, and he's not handling it well, admitting he doesn't even want to go out with his friends anymore.
He knows he messed up, acknowledging he's "el primer lugar en la lista de tus decepciones" (first place on your list of disappointments). But his main argument is pretty blunt: her new guy is no better. He warns her, "Él te va a hacer lo mismo, mami, no pierdas tiempo" (He's going to do the same thing to you, mommy, don't waste your time). His big conclusion, and a half-hearted apology, is the song's title: "No hay vato perfecto, por cierto, lo siento" (There's no perfect guy, by the way, I'm sorry). He's basically saying, 'Yeah I'm flawed, but so is everyone else, so you might as well come back to me.'