Sunrun (RUN) AI Stock Analysis

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Sunrun

(NASDAQ:RUN)

Rating:48Neutral

Price Target:

$8.00

▼(-11.01%Downside)

Sunrun's overall stock score is primarily driven by significant financial performance challenges, including persistent losses and high leverage. While the earnings call highlighted strong cash generation and market share gains, which provide some optimism, the technical signals and valuation concerns limit the stock's attractiveness. Operational improvements and strategic initiatives are crucial to addressing financial risks and enhancing future performance.

Positive Factors

Growth Potential

RUN's grid services business is nascent but holds significant long-term potential.

Market Position

RUN is the largest U.S. solar installation company, which provides it with the scale and access to capital to adapt to current macro challenges.

Negative Factors

Financial Challenges

RUN's base business has an estimated cash flow shortfall of ~$85MM annually.

Regulatory Risk

The proposed elimination of section 48E credits for residential solar leases poses a material risk to RUN's business model.

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

Market Cap

$2.07B

Dividend YieldN/A

Average Volume (3M)29.63M

Price to Earnings (P/E)―

Beta (1Y)1.79

Revenue Growth-2.08%

EPS Growth-80.64%

CountryUS

Employees11,058

SectorTechnology

Sector Strength84

IndustrySolar

Share Statistics

EPS (TTM)0.20

Shares Outstanding228,486,470

10 Day Avg. Volume39,752,086

30 Day Avg. Volume29,629,208

Financial Highlights & Ratios

PEG Ratio0.38

Price to Book (P/B)0.76

Price to Sales (P/S)0.00

P/FCF Ratio-1.78

Enterprise Value/Market Cap6.33

Enterprise Value/Revenue1.59

Enterprise Value/Gross Profit33.10

Enterprise Value/Ebitda-1.83

Forecast

1Y Price Target

$10.79

Price Target Upside20.02% Upside

Rating ConsensusHold

Number of Analyst Covering19

Sunrun Business Overview & Revenue Model

Company DescriptionSunrun Inc. (RUN) is a leading provider of residential solar energy services in the United States. The company specializes in designing, installing, financing, and maintaining solar energy systems for homeowners. Sunrun aims to empower homeowners to adopt renewable energy, offering solar power solutions that help reduce energy bills and carbon footprints. The company's services include solar panel installation, battery storage, and energy management solutions, with a focus on making clean energy accessible and affordable.

How the Company Makes MoneySunrun makes money primarily through the sale and lease of solar energy systems. The company offers customers the option to purchase solar systems outright, finance them through loans, or enter into long-term leases or power purchase agreements (PPAs). In lease and PPA arrangements, Sunrun owns and maintains the solar systems while customers pay a fixed monthly rate or for the energy generated. Additionally, Sunrun generates revenue from selling renewable energy credits and offering energy storage solutions like battery systems. Key partnerships, such as those with homebuilders and utility companies, as well as government incentives for renewable energy, significantly contribute to its earnings.

Sunrun Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes revenue from different business segments, highlighting which areas drive growth and profitability, and where strategic adjustments might be needed.

Chart InsightsSunrun's revenue from 'Customer Agreements and Incentives' and 'Energy Systems and Product Sales' segments has shown a significant shift, with the former now leading revenue generation. This change aligns with Sunrun's strategic focus on increasing customer value and storage attachment rates, as highlighted in their earnings call. Despite challenges from tariffs and tax policy uncertainties, Sunrun's innovative offerings and AI-driven efficiencies are driving growth. The company's robust cash generation and market share gains underscore its resilience and adaptability in a dynamic regulatory environment.

Data provided by:

Main Street Data

Sunrun Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 21.65%|

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 Financial Statement Overview

Summary

Sunrun faces substantial financial challenges with persistent losses and high leverage. While revenue shows modest growth, profitability and cash flow metrics raise concerns about operational efficiency and financial stability. Strategic initiatives are necessary to improve margins and manage debt effectively for long-term sustainability.

Income Statement

Negative

Sunrun's TTM (Trailing-Twelve-Months) income statement shows a challenging financial landscape with negative EBIT and EBITDA margins, indicating operational inefficiency. The net profit margin is also negative, reflecting ongoing losses. Although there is a slight increase in revenue, it is overshadowed by the substantial losses and declining gross profit margins.

Balance Sheet

Negative

The balance sheet reveals a high debt-to-equity ratio, signaling significant leverage which could pose financial risks. The equity ratio is low, indicating limited equity cushion. However, the company maintains a reasonable level of assets, which could support future growth if managed effectively.

Cash Flow

Negative

Sunrun's cash flow statement highlights negative free cash flow and operating cash flow, reflecting cash burn issues. While financing activities provide some liquidity, the operating cash flow to net income ratio is negative, indicating inefficiencies in converting income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.08B	2.04B	2.26B	2.32B	1.61B	922.19M
Gross Profit	394.90M	328.55M	163.06M	298.71M	244.48M	178.66M
EBITDA	-2.96B	-2.91B	-1.46B	60.22M	-268.68M	-213.98M
Net Income	-2.71B	-2.85B	-1.60B	-849.64M	-980.53M	-626.95M
Balance Sheet
Total Assets	20.38B	19.90B	20.45B	19.27B	16.48B	14.38B
Cash, Cash Equivalents and Short-Term Investments	604.87M	574.96M	678.82M	740.51M	617.63M	519.97M
Total Debt	13.67B	13.02B	11.09B	8.73B	6.85B	5.16B
Total Liabilities	16.28B	15.73B	13.54B	11.09B	8.91B	7.09B
Stockholders Equity	2.62B	2.55B	5.23B	6.71B	6.25B	6.08B
Cash Flow
Free Cash Flow	-3.54B	-3.47B	-3.43B	-2.86B	-2.50B	-1.29B
Operating Cash Flow	-727.27M	-766.15M	-820.74M	-848.79M	-817.19M	-317.97M
Investing Cash Flow	-2.82B	-2.70B	-2.61B	-2.09B	-1.69B	-497.79M
Financing Cash Flow	3.74B	3.43B	3.47B	3.04B	2.65B	1.16B

Sunrun Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.99

Price Trends

50DMA

8.29

Positive

100DMA

7.68

Positive

200DMA

10.12

Negative

Market Momentum

MACD

-0.02

Negative

RSI

56.38

Neutral

STOCH

86.56

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 8.99 is above the 20-day moving average (MA) of 7.96, above the 50-day MA of 8.29, and below the 200-day MA of 10.12, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 56.38 is Neutral, neither overbought nor oversold. The STOCH value of 86.56 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 (69)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSPN	71 Outperform	$648.77M	11.54	28.92%	2.83%	-0.26%	―
Sector *	69 Neutral	¥229.55B	14.48	7.64%	2.71%	9.13%	8.50%
JKS	60 Neutral	$1.18B	118.10	-9.49%	5.45%	-30.26%	-156.69%
ARRY	56 Neutral	$1.01B	―	-49.11%	―	-21.31%	-593.57%
CSIQ	54 Neutral	$749.42M	20.05	-0.39%	―	-19.06%	-104.91%
CGNT	51 Neutral	$679.27M	―	-4.06%	―	―	―
RUN	48 Neutral	$2.07B	―	-69.47%	―	-2.08%	-80.64%

* Technology Sector Average

Performance Comparison

RUN

Sunrun

8.99

-3.22

-26.37%

CSIQ

Canadian Solar

12.45

-2.90

-18.89%

JKS

JinkoSolar

23.50

4.55

24.01%

OSPN

OneSpan

17.19

4.86

39.42%

ARRY

Array Technologies

6.96

-2.66

-27.65%

CGNT

Cognyte Software

9.09

1.43

18.67%

Sunrun Corporate Events

Executive/Board ChangesShareholder Meetings

Sunrun Holds Virtual Annual Stockholders Meeting

Neutral

Jun 13, 2025

On June 11, 2025, Sunrun Inc. held its Annual Meeting of Stockholders virtually, where five proposals were considered and voted upon. The stockholders elected three Class I directors, approved executive compensation, ratified Ernst & Young LLP as the independent accounting firm, amended the 2015 Equity Incentive Plan, and decided to hold annual advisory votes on executive compensation.

The most recent analyst rating on (RUN) stock is a Buy with a $23.00 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.Date of analysis: Jul 01, 2025