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Sunrun (RUN)
NASDAQ:RUN
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Sunrun
(NASDAQ:RUN)
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Rating:47Neutral
Price Target:
$11.50
▼(-5.51% Downside)
Action:ReiteratedDate:03/04/26
The score is held down primarily by weak financial quality—especially persistent negative operating/free cash flow and elevated leverage—despite a rebound in revenue and reported profitability. Technicals remain bearish with the stock below major moving averages and negative MACD, only partially mitigated by oversold readings. A low P/E provides some valuation support, while the latest earnings call and financing/covenant updates are moderately positive but still highlight near-term cost and financing sensitivity.
Positive Factors
Improving cash generation and deleveraging
Sustained multi-hundred-million dollar cash generation in 2025 materially improves Sunrun's ability to pay down recourse debt and fund operations without solely relying on new financings. That strengthens liquidity, supports covenant compliance and enables measured deleveraging and reinvestment over the medium term.
Scale in storage and grid services
A high and rising storage attachment rate and growing dispatchable capacity create recurring revenue from grid services and enhance value per customer. Scale in VPPs and outage resiliency supports durable differentiation, increases product stickiness and opens long-term utility program revenue streams.
Diversified capital solutions and JV financing
Broadening tax-equity, nonrecourse debt and a large JV reduces dependence on single funding channels and improves advance rates. Diversified, project-level financing supports continued deployment while limiting parent recourse, enabling growth even while parent-level leverage and cash-generation targets are being addressed.
Negative Factors
Persistent negative operating cash flow
Negative operating cash flow of this magnitude forces reliance on asset sales, tax equity and debt to fund growth. That structural cash burn increases refinancing frequency and cost, constrains capital allocation, and makes sustainable organic growth and true free-cash-flow conversion uncertain without continued financing improvements.
Elevated leverage and large absolute debt
Very high leverage and large absolute indebtedness reduce resilience to market or financing shocks and tighten covenant headroom. Even with lender support, servicing and refinancing risk remain material, constraining strategic optionality and increasing sensitivity to interest rates and capital-market access over the medium term.
Weak underlying margins and volatile unit economics
Negative gross margins and persistent negative EBITDA indicate the business still relies on financing and accounting treatments to show GAAP profits. Rising creation and insurance costs, falling net subscriber value and reliance on asset-sale monetization can compress long-term unit economics and hinder sustainably high margins.
Sunrun (RUN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.71B
Dividend YieldN/A
Average Volume (3M)10.41M
Price to Earnings (P/E)9.5
Beta (1Y)1.47
Revenue Growth13.79%
EPS Growth-527.48%
CountryUS
Employees11,058
SectorTechnology
Sector Strength88
IndustrySolar
Share Statistics
EPS (TTM)0.38
Shares Outstanding234,492,400
10 Day Avg. Volume14,083,576
30 Day Avg. Volume10,414,885
Financial Highlights & Ratios
PEG Ratio-0.08
Price to Book (P/B)1.37
Price to Sales (P/S)1.45
P/FCF Ratio-10.11
Enterprise Value/Market Cap6.10
Enterprise Value/Revenue5.58
Enterprise Value/Gross Profit19.51
Enterprise Value/Ebitda27.62
Forecast
1Y Price Target
$21.34Price Target Upside75.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)0.85
Revenue Forecast (FY)$2.93B
Sunrun Business Overview & Revenue Model
Company DescriptionSunrun Inc. engages in the design, development, installation, sale, ownership, and maintenance of residential solar energy systems in the United States. It also sells solar energy systems and products, such as panels and racking; and solar leads generated to customers. In addition, the company offers battery storage along with solar energy systems. Its primary customers are residential homeowners. The company markets and sells its products through direct-to-consumer approach across online, retail, mass media, digital media, canvassing, field marketing, and referral channels, as well as its partner network. Sunrun Inc. was founded in 2007 and is headquartered in San Francisco, California.
How the Company Makes MoneySunrun generates revenue through multiple streams primarily centered around the sale and installation of solar energy systems. The company offers customers various financing options, including cash purchases, solar leases, and power purchase agreements (PPAs), where customers pay for the solar energy produced rather than the system itself. In addition to initial system sales, Sunrun earns recurring revenue from long-term agreements under leases and PPAs, which provide a stable cash flow as customers pay over time for the energy generated. Furthermore, Sunrun benefits from federal and state tax incentives, such as the Investment Tax Credit (ITC), which can enhance the financial viability of solar projects. Partnerships with other companies, such as home improvement firms and utility companies, also contribute to Sunrun's growth by expanding its customer base and facilitating access to new markets.
Sunrun Key Performance Indicators (KPIs)
Any
Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and where strategic adjustments might be needed.
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and where strategic adjustments might be needed.
Data provided by:
The Fly
The FlySunrun Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
Overall the call conveyed a constructive outlook: Sunrun reported meaningful cash generation, strengthened its balance sheet, materially expanded storage and grid-service capabilities, and developed diversified financing partnerships (including a major JV with Hannon Armstrong). Management acknowledged near-term headwinds—rising creation and insurance costs, a deliberate reduction in lower-margin affiliate volume (>40% decline), and some deterioration in quarterly value-creation metrics driven by financing mix—but positioned these as intentional, margin-focused decisions designed to improve long-term returns and scale its distributed power plant. The tone emphasized continued operational execution, product innovation (Flex), and confidence in growing direct-channel volumes and cash generation in 2026 despite short-term variability and modeling complexity from asset-sale activity.Q4-2025 Updates
Positive Updates
Strong cash generation and deleveraging
Sunrun delivered $377 million of cash generation for full-year 2025 and $187 million in Q4; paid down approximately $148 million of parent-level recourse debt in 2025 (including $81 million in Q4); increased unrestricted cash by $248 million and grew net earning assets by $1.8 billion.
Material growth in storage and grid services
Storage attachment rate rose to 71% (up 9 percentage points YoY); storage capacity installed grew ~26%; added ~1.5 GWh of dispatchable generation in 2025 and surpassed 4 GWh of total dispatchable energy; dispatched ~425 MW to the grid across programs and generated "tens of millions" in dispatch revenue; 237,000 storage customers experienced >650,000 unique outages, underscoring resiliency value.
Stable subscriber additions and larger system sizes
Full-year subscriber additions were ~108,000 (approximately flat YoY) with ~25,000 in Q4; average system size grew ~4%, driving similar solar capacity growth; management highlighted the highest subscriber values recorded and cited upfront net subscriber value exceeding ~$3,200 per subscriber addition in 2025.
Expanded and diversified capital solutions
In 2025 Sunrun added ~$2.7 billion of traditional and hybrid tax equity and ~$2.8 billion of nonrecourse project debt; recorded material proceeds from asset sales ($684 million reported for 2025, $569 million in Q4); Q4 aggregate upfront proceeds for additions estimated at ~$1.1 billion with an advance rate ~91% (up 5 ppt YoY); launched a joint venture with Hannon Armstrong with up to $500 million to finance ~300 MW across ~40,000 homes.
Product and market leadership
Launched Flex (thousands of installs per quarter) and expanded distributed power plant programs (18 active programs in 2025); Sunrun direct now represents over two-thirds of volume with expected high single- to low double-digit growth in the direct channel in 2026; demonstrated strong execution in Texas (25% YoY growth) and industry-leading NPS and customer satisfaction.
Negative Updates
Quarterly declines in aggregate subscriber value and contracted net value creation
Q4 aggregate subscriber value was $1.3 billion, an 18% decline YoY; Q4 contracted net value creation was $176 million (≈14% margin on aggregate contracted subscriber value), lower than the prior year largely due to a higher mix of assets sold to infrastructure investors.
Pressure on unit economics and net subscriber value
Net subscriber value decreased by $3,800 YoY to approximately $9,100 in Q4; subscriber value was ~ $50,200, a 2% decrease YoY; aggregate creation costs rose 8% YoY, installation cost per subscriber increased ~7% YoY, and sales & marketing cost per subscriber rose ~4% YoY—driving headwinds to unit-level margins.
Near-term volume reductions and conservative 2026 mix
Management will reduce affiliate volumes by over 40% in 2026 (aiming for better margins and control), which will result in slight declines in overall volumes and contributed to expectations of lower aggregated value-creation metrics year-over-year; Q1 guidance points to aggregate subscriber value of $850M–$950M and contracted net value creation of $25M–$125M.
Rising costs and tax-equity/ITC headwinds
Company expects lower proceeds from ITC transfers due to softer market pricing, higher insurance costs, and higher solar module prices (partly driven by domestic sourcing); some tax-equity participants remain sidelined awaiting further regulatory clarity (e.g., additional FIAC guidance), weighing on pricing and near-term cash generation assumptions.
Accounting and modeling complexity from asset-sale mix
A sharp increase in asset-sale/asset-sale-like monetizations (from ~10% of mix in Q3 to ~51% in Q4) boosted GAAP revenue and operating profit but reduced non-GAAP value-creation metrics and increased expensing of origination costs (higher OpEx), complicating YoY comparisons and modeling of long-term value and unit economics.
Company Guidance
Sunrun guided to high single‑digit to low double‑digit growth in its Sunrun Direct business in 2026 (with Q1 as the low point and sequential growth thereafter) while cutting affiliate volumes by over 40%, which will modestly reduce overall volumes; management expects to expand storage attachment beyond the 71% exit rate in 2025 (up 9 ppt YoY) and to continue leveraging dispatchable assets. For the year they forecast aggregate subscriber value of $4.8–$5.2 billion, contracted net value creation of $650 million–$1.05 billion and cash generation of $250 million–$450 million (Q1 aggregate subscriber value $850–$950M, Q1 contracted net value creation $25–$125M; Q1 cash gen expected to be positive but dependent on March financings); they plan $50–$100 million of incremental safe‑harbor investments, expect to repay over $100 million of parent recourse debt in 2026 and to be below a 2x recourse/debt-to-cash‑generation target. Capital plans include continued use of asset‑sale/JV structures (51% of additions monetized in Q4 but expected to decline from that level), the HASI JV (expected to finance >300 MW across >40,000 homes with up to $500M of investment), and broad access to capital after adding ~$2.7B of tax equity and ~$2.8B of nonrecourse project debt in 2025 (Q4 metrics included aggregate subscriber value $1.3B, aggregate creation costs $1.0B, contracted net value creation $176M and Q4 cash generation $187M; full‑year 2025 cash generation was $377M).Sunrun Financial Statement Overview
Summary
Mixed fundamentals. Revenue rebounded strongly in 2025 (+27.6% YoY) and reported net income turned positive, but profitability quality remains weak with negative gross margin and negative EBITDA. Balance sheet risk is elevated with materially higher leverage (debt-to-equity ~4.7x). Cash flow is the largest constraint: operating and free cash flow are persistently negative in the financial statements provided, indicating ongoing funding dependence.Income Statement
Revenue rebounded strongly in 2025 (+27.6% YoY) after modest contraction in 2023–2024, and reported net income turned positive with a solid net margin (~15%). However, underlying profitability remains weak: gross margin fell to negative in 2025 and EBITDA stayed negative, following extremely poor margins in 2023–2024. Overall, the top-line growth and near-term earnings improvement are positives, but the margin profile is volatile and still structurally challenged.42
Neutral
Balance Sheet
Leverage has increased materially, with debt rising to ~$14.8B in 2025 and debt-to-equity elevated (~4.7x), which limits financial flexibility. Equity remains positive (~$3.1B) and total assets have grown, but the capital structure is meaningfully more levered than in 2020–2022. Return on equity improved sharply in 2025, yet that improvement comes alongside higher balance-sheet risk.28
Negative
Cash Flow
Cash generation is a key weakness: operating cash flow is negative across all periods shown and remained deeply negative in 2025 (~-$421M). Free cash flow is also consistently negative, and while 2025 free cash flow improved substantially versus 2024, it still reflects ongoing cash burn and dependence on external funding. This persistent negative operating cash flow profile is the main constraint on overall financial quality.18
Very Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.96B | 2.04B | 2.26B | 2.32B | 1.61B |
| Gross Profit | 792.50M | 328.55M | 163.06M | 298.71M | 244.48M |
| EBITDA | 2.05B | -2.91B | -1.51B | 49.51M | -255.46M |
| Net Income | 449.95M | -2.85B | -1.60B | 173.38M | -79.42M |
Balance Sheet | |||||
| Total Assets | 24.18B | 19.90B | 20.45B | 19.27B | 16.48B |
| Cash, Cash Equivalents and Short-Term Investments | 1.24B | 574.96M | 678.82M | 740.51M | 617.63M |
| Total Debt | 14.89B | 13.02B | 11.09B | 8.76B | 6.87B |
| Total Liabilities | 19.19B | 15.73B | 13.54B | 11.09B | 8.91B |
| Stockholders Equity | 3.13B | 2.55B | 5.23B | 6.71B | 6.25B |
Cash Flow | |||||
| Free Cash Flow | -423.22M | -3.47B | -3.43B | -2.86B | -2.50B |
| Operating Cash Flow | -421.44M | -766.15M | -820.74M | -848.79M | -817.19M |
| Investing Cash Flow | -2.50B | -2.70B | -1.09B | -713.84M | -489.41M |
| Financing Cash Flow | 3.21B | 3.43B | 1.94B | 1.67B | 1.45B |
Sunrun Technical Analysis
Negative
12.17
Price Trends
18.70
Negative
18.91
Negative
15.54
Negative
Market Momentum
-1.49
Positive
29.99
Positive
4.14
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RUN, the sentiment is Negative. The current price of 12.17 is below the 20-day moving average (MA) of 18.32, below the 50-day MA of 18.70, and below the 200-day MA of 15.54, indicating a bearish trend. The MACD of -1.49 indicates Positive momentum. The RSI at 29.99 is Positive, neither overbought nor oversold. The STOCH value of 4.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $5.59B | 27.11 | 17.93% | ― | 20.97% | 226.98% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $2.28B | -4.26 | -74.68% | ― | -0.14% | 66.71% | |
58 Neutral | $989.63M | 42.34 | 5.80% | ― | 2.68% | 2.90% | |
52 Neutral | $1.12B | -26.92 | -19.02% | ― | 35.75% | 37.97% | |
47 Neutral | $2.71B | 9.51 | 15.90% | ― | 13.79% | -527.48% | |
45 Neutral | $1.12B | 24.53 | 0.56% | ― | -4.46% | 1645.26% |
* Technology Sector Average
RUN
Sunrun
12.17
5.27
76.38%
CSIQ
Canadian Solar
17.04
6.94
68.71%
ENPH
Enphase Energy
42.66
-15.99
-27.26%
SEDG
SolarEdge Technologies
37.94
22.35
143.36%
ARRY
Array Technologies
7.31
1.89
34.87%
SHLS
Shoals Technologies Group
6.14
3.02
96.79%
Sunrun Corporate Events
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Sunrun Amends Credit Agreement, Extends Maturity to 2028
Positive
Jan 6, 2026
On December 31, 2025, Sunrun Inc. amended its existing Credit Agreement with KeyBank and other lenders, extending the facility’s maturity date by one year to March 1, 2028, while reducing total commitments to about $321.4 million, roughly matching current utilization, and allowing further step-downs to no less than $150 million as principal is prepaid under cash-sweep provisions introduced earlier in 2024. The amendment also raises the letter of credit sublimit from $100 million to $150 million, tightens financial discipline by gradually increasing quarter-end liquidity requirements up to 20% of amounts utilized and lowering the maximum modified leverage ratio to 5.0x, and confirms that Sunrun was in compliance with all existing and modified covenants as of September 30, 2025, signaling maintained lender support and a more conservative capital structure as it manages leverage and liquidity in its financing strategy.
The most recent analyst rating on (RUN) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Sunrun stock, see the RUN Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.