Sunrun (RUN) AI Stock Analysis

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Sunrun

(NASDAQ:RUN)

56Neutral

Sunrun's overall score is driven by its financial challenges, including declining revenues and high leverage, which weigh heavily on the score. However, the company's positive earnings call highlights operational improvements and market share gains, providing some optimism. Technical indicators show positive momentum, yet valuation remains a concern due to ongoing losses. Despite growth opportunities in the solar industry, these mixed signals result in a moderate overall score.

Positive Factors

Differentiation

RUN's ability to safe harbor sizable equipment through the next four years could differentiate it from cash-strapped peers.

Financial Performance

1Q25 results exceeded guidance with strong solar and storage additions.

Product Offering

Sunrun continues to execute on growing contracted subscriber value supported by higher value storage and the company's new Flex offering to drive upfront proceeds exceeding creation costs and generating cash.

Negative Factors

Growth Outlook

The price target is lowered due to a reduced growth outlook and higher discount rate, reflecting elevated risk associated with the market.

Market Challenges

Soft residential solar demand, IRA uncertainty, and tariffs create a challenging setup.

Tariff Impact

Tariff headwinds have led to increased creation cost estimates, impacting cash generation guidance.

Sunrun (RUN) vs. S&P 500 (SPY)

Market Cap

$2.14B

Dividend YieldN/A

Average Volume (3M)12.56M

Price to Earnings (P/E)―

Beta (1Y)1.18

Revenue Growth-2.08%

EPS Growth-80.64%

CountryUS

Employees11,058

SectorTechnology

Sector Strength65

IndustrySolar

Share Statistics

EPS (TTM)0.20

Shares Outstanding228,486,470

10 Day Avg. Volume12,187,205

30 Day Avg. Volume12,561,655

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.83

Price to Sales (P/S)0.00

P/FCF Ratio-1.43

Enterprise Value/Market Cap6.81

Enterprise Value/Revenue1.77

Enterprise Value/Gross Profit49.94

Enterprise Value/Ebitda-2.75

Forecast

1Y Price Target

$12.07

Price Target Upside10.13% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering20

Sunrun Business Overview & Revenue Model

Company DescriptionSunrun Inc. is a leading provider of residential solar energy solutions in the United States. The company operates within the renewable energy sector and focuses on designing, installing, financing, and maintaining residential solar energy systems. Sunrun's core services include solar leasing, power purchase agreements (PPAs), and solar system sales, enabling homeowners to access clean energy while reducing their electricity costs.

How the Company Makes MoneySunrun makes money primarily through the sale and installation of solar energy systems, as well as through long-term customer agreements such as solar leases and power purchase agreements (PPAs). In these agreements, customers either pay a fixed monthly fee or buy the power generated by the solar system at a predetermined rate. Sunrun also generates revenue by selling solar renewable energy credits (SRECs) and through federal and state incentives related to solar energy production. Additionally, the company benefits from strategic partnerships with home builders and utilities to expand its customer base and enhance its service offerings.

Sunrun Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas contribute most to Sunrun's top line and indicating potential growth opportunities or challenges in specific markets.

Chart InsightsSunrun's revenue from 'Customer Agreements and Incentives' has shown robust growth since 2023, reflecting a strategic shift towards bundled offerings. Despite zero revenue in other segments, the earnings call highlights strong cash generation and market share gains, with a notable increase in storage attachment rates. The introduction of Sunrun Flex and AI-driven efficiencies are driving operational improvements. However, tariff and tax policy uncertainties pose potential cost challenges. The company's focus on cash flow and debt reduction suggests a strategic pivot towards financial stability and resilience.

Data provided by:

Main Street Data

Sunrun Financial Statement Overview

Summary

Sunrun faces financial difficulties characterized by declining revenues, persistent losses, and high leverage. The company's profitability and cash generation capabilities are under pressure, raising concerns about its financial health and stability.

Income Statement

Neutral

The income statement shows significant challenges for Sunrun, with a declining revenue trend from 2022 to 2024 and consistently negative net income, indicating sustained losses. The gross profit margin remained stable in 2024, but the net profit margin has been negative, reflecting ongoing profitability issues. EBIT and EBITDA margins are also negative, indicating operational inefficiencies.

Balance Sheet

Neutral

Sunrun's balance sheet reflects a high debt-to-equity ratio due to substantial increases in total debt over the years. Stockholders' equity has decreased significantly, leading to a weakened equity ratio. Despite a strong asset base, the company faces risks due to high leverage and declining equity, which could impact short-term financial stability.

Cash Flow

Negative

The cash flow statement highlights persistent negative free cash flow, exacerbating liquidity concerns. Operating cash flow has remained consistently negative, further indicating cash management challenges. The free cash flow to net income ratio is concerning, reflecting insufficient cash generation relative to reported losses.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.04B	2.26B	2.32B	1.61B	922.19M
	Gross Profit
328.55M	163.06M	298.71M	244.48M	178.66M
	EBIT
-3.70B	-1.98B	-401.54M	-666.19M	-465.11M
	EBITDA
-2.91B	-1.46B	60.22M	-268.68M	-213.98M
	Net Income Common Stockholders
-2.85B	-1.60B	-849.64M	-980.53M	-626.95M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
574.96M	678.82M	740.51M	617.63M	519.97M
	Total Assets
19.90B	20.45B	19.27B	16.48B	14.38B
	Total Debt
13.02B	11.09B	8.73B	6.85B	5.16B
	Net Debt
12.45B	10.41B	7.99B	6.23B	4.64B
	Total Liabilities
15.73B	13.54B	11.09B	8.91B	7.09B
	Stockholders Equity
2.55B	5.23B	6.71B	6.25B	6.08B
Cash Flow		Free Cash Flow
-3.47B	-3.43B	-2.86B	-2.50B	-1.29B
	Operating Cash Flow
-766.15M	-820.74M	-848.79M	-817.19M	-317.97M
	Investing Cash Flow
-2.70B	-2.61B	-2.09B	-1.69B	-497.79M
	Financing Cash Flow
3.43B	3.47B	3.04B	2.65B	1.16B

Sunrun Technical Analysis

Technical Analysis Sentiment

Positive

Last Price10.96

Price Trends

50DMA

6.87

Positive

100DMA

8.07

Positive

200DMA

11.89

Negative

Market Momentum

MACD

0.62

Negative

RSI

78.42

Negative

STOCH

93.37

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RUN, the sentiment is Positive. The current price of 10.96 is above the 20-day moving average (MA) of 7.40, above the 50-day MA of 6.87, and below the 200-day MA of 11.89, indicating a neutral trend. The MACD of 0.62 indicates Negative momentum. The RSI at 78.42 is Negative, neither overbought nor oversold. The STOCH value of 93.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RUN.

Sunrun Risk Analysis

Sunrun disclosed 73 risk factors in its most recent earnings report. Sunrun reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Sunrun Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSPN	72 Outperform	$603.28M	10.73	28.92%	0.76%	-0.26%	―
ARRY	63 Neutral	$907.65M	―	-49.11%	―	-21.31%	-593.57%
JKS	63 Neutral	$944.33M	118.10	-9.49%	15.71%	-30.26%	-156.69%
Sector *	60 Neutral	$10.96B	10.27	-6.73%	2.97%	7.73%	-11.60%
CGNT	57 Neutral	$705.17M	―	-6.09%	―	―	―
RUN	56 Neutral	$2.14B	―	-69.47%	―	-2.08%	-80.64%
CSIQ	51 Neutral	$655.56M	18.09	1.34%	―	-21.28%	-87.20%

* Technology Sector Average

Performance Comparison

RUN

Sunrun

10.96

-0.56

-4.86%

CSIQ

Canadian Solar

10.59

-5.47

-34.06%

JKS

JinkoSolar

19.40

-3.52

-15.36%

OSPN

OneSpan

16.44

4.51

37.80%

ARRY

Array Technologies

6.84

-5.82

-45.97%

CGNT

Cognyte Software

9.96

2.28

29.69%

Sunrun Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 48.31%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call reflects a generally optimistic outlook with strong operational performance, cash generation, and market share gains. However, there are concerns regarding the impact of tariffs and potential changes to tax policies, which may affect future costs and cash generation.

Q1-2025 Updates

Positive Updates

Positive Cash Generation

Sunrun generated $56 million in cash in Q1 2025, marking the fourth consecutive quarter of positive cash generation.

Increase in Unrestricted Cash

Ended Q1 with $605 million in unrestricted cash, a $30 million increase from the prior quarter.

Customer Additions and Subscriber Value Growth

Total customer additions grew 6% year-over-year, and aggregate subscriber value grew 23% to more than $1.2 billion.

High Storage Attachment Rate

Customer additions with storage grew by over 46% from Q1 of last year, achieving a record-high 69% storage attachment rate.

Launch of Sunrun Flex

Introduced innovative product Sunrun Flex, which has seen over 10,000, or over half of Flex-eligible customers, select Flex over non-Flex alternatives.

Strong Demand and Market Share Gains

Sunrun increased its market share to approximately 19% of new solar installations and about 45% of new storage installations across the country.

AI-Driven Efficiency Improvements

Implemented over 100 AI initiatives, including a system design tool that improved design process efficiency by 30%.

Negative Updates

Tariff and Tax Policy Uncertainties

Dynamic environment for tax policy and tariffs creates planning difficulties and potential cost headwinds of $100 million to $200 million in 2025 due to tariffs.

Impact of Tariffs on Costs

Hardware costs represent about one-third of total costs, with tariffs expected to increase costs by 3% to 7% for 2025.

Potential Impact of ITC Changes

Concerns over the potential removal of transferability of tax credits and potential reduction of ITC from 45% to 30%.

Company Guidance

During Sunrun's first-quarter earnings call for fiscal year 2025, the company reported exceeding their volume and cash generation targets, generating $56 million in cash and marking their fourth consecutive quarter of positive cash flow. They also achieved a $30 million increase in unrestricted cash from the previous quarter, ending with $605 million. Sunrun reduced their parent debt by $27 million and reported a 6% increase in total customer additions from the previous year, with a significant 23% increase in aggregate subscriber value to over $1.2 billion. The company also noted a record-high 69% storage attachment rate, with customer additions incorporating storage growing by over 46%. Market share for new solar installations grew to approximately 19%, and new storage installations reached about 45% across the U.S. Sunrun announced their innovative product, Flex, which allows for increased energy consumption flexibility, projecting $20 million in additional annual customer payments if 100,000 customers increase their usage by 15%. Despite facing challenges with tariffs and tax policy uncertainties, Sunrun remains optimistic about generating meaningful cash this year, aiming for $200 million to $500 million in cash generation. They reported a 15% increase in subscriber value to approximately $52,000, with net subscriber value growing by 66% year-over-year to $10,390. They also highlighted their efforts in leveraging AI for operational efficiencies and cost reductions. The company plans to pay down $100 million or more of recourse debt in 2025 and introduced guidance for aggregate subscriber value to be between $5.7 and $6 billion, with contracted net value creation expected to range from $650 million to $850 million.

Sunrun Corporate Events

Executive/Board Changes

Sunrun Appoints Maria Barak as Chief Accounting Officer

Neutral

Feb 12, 2025

On February 6, 2025, Sunrun Inc. appointed Ms. Maria Barak as the Chief Accounting Officer, taking over from Mr. Danny Abajian, who will continue as the Principal Financial Officer. Ms. Barak, a Certified Public Accountant with extensive experience, joined Sunrun in 2017 and has held various positions, including VP, Corporate Controller.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.