Last Updated: 13 Nov 2024
Executive Summary
Sunrun Inc. (RUN) is a leading provider of residential solar energy systems in the United States. Despite facing challenges in profitability, the company has strong growth prospects in the rapidly expanding solar energy market. The latest stock price of $9.74 presents a potential buying opportunity for investors seeking exposure to this sector.
Company Overview
Sunrun designs, installs, sells, and maintains residential solar energy systems. The company operates in 22 states and the District of Columbia. Sunrun's mission is to make solar energy affordable and accessible to homeowners.
Fundamental Analysis
Revenue: Sunrun's revenue has grown steadily in recent years, reaching $2.04 billion in the trailing twelve months. However, the company has yet to turn a profit, with an EBITDA of -$34.9 million.
Earnings: Sunrun's EPS is currently -$1.75. The company has faced challenges in controlling costs, leading to negative profit margins.
Valuation: Sunrun's forward PE ratio is 85.47, indicating that the stock is trading at a premium relative to its earnings potential. However, the company's PEG ratio of 0.45 suggests that it may be undervalued based on its growth prospects.
Technical Analysis
Trend: Sunrun's stock price has been in a downtrend since early 2023. The 50-day and 200-day moving averages are both below the current price, indicating a bearish trend.
Support and Resistance: The stock has recently found support around $9.50. Resistance is located at $10.50 and $12.00.
Momentum: The relative strength index (RSI) is below 50, indicating that the stock is in oversold territory. This could suggest that a bounce is possible.
Short Term Outlook
In the short term, Sunrun's stock price could continue to trade within the $9.50-$10.50 range. A breakout above $10.50 could signal a reversal of the downtrend. However, a breakdown below $9.50 could lead to further declines.
Long Term Outlook
The long-term outlook for Sunrun is positive. The solar energy market is expected to grow rapidly in the coming years, driven by increasing demand for renewable energy and government incentives. Sunrun is well-positioned to capitalize on this growth with its strong brand and distribution network.
Analyst Recommendations
Analysts are generally bullish on Sunrun's long-term prospects. Of the 29 analysts covering the stock, 19 have a "Buy" or "Strong Buy" rating, while 9 have a "Hold" rating and 1 has a "Sell" rating. The average analyst target price is $20.26, representing a potential upside of over 100% from the current price.
