Being a “high-risk buy” might be considered a mark of honor. It also might be seen as a somewhat limited compliment. Declaring Sunrun (NASDAQ:RUN) a “high-risk buy” was Citibank, who—via analyst Vikram Bagri—pointed out that Sunrun enjoyed a rather exciting position: an ability to pick up market share in the highly volatile residential solar panel market. Because that market is so volatile, however, that’s where the “high-risk” part came into play. Citi also pared down its price target on Sunrun, dropping it from $25 to $21, noting that long-term cash flow projections weren’t looking quite as good as they once did.
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A recent comparison between Sunrun and rival SunPower (NASDAQ:SPWR) made it clear that Sunrun might have its work cut out for it going forward. Perhaps the best news for Sunrun here is that SunPower offers a largely different service than SunPower. While Sunrun offers what amounts to “solar-as-a-service,” with some system purchasing available, SunPower focuses more on the systems than the service. That’s going to give Sunrun an opportunity to expand its position with clever marketing. However, given the overall state of the homeowner these days and the budget stresses said homeowner faces, no amount of marketing will get some of them interested in a big new purchase.
Regardless, analysts are largely on board with Sunrun. Currently, Sunrun stock has a Strong Buy consensus rating, thanks to 14 Buy recommendations and three Holds. Further, with an average price target of $32.88, Sunrun stock offers investors 112% upside potential.
