Over the past week, Sunrun Inc (RUN, Financial) has experienced a remarkable surge in its stock price, with a 29.34% gain, reflecting a significant uptick in investor confidence. This performance is part of a broader trend, as the stock has also seen a 15.74% increase over the past three months. Despite this positive momentum, the company's current GF Value stands at $35.02, which is lower than the past GF Value of $43.68. This discrepancy suggests that investors should approach the stock with caution, as it is currently labeled a Possible Value Trap, Think Twice, both now and in the past GF Valuation.
Introduction to Sunrun Inc
Sunrun Inc, operating within the semiconductors industry, is a leading provider of residential solar energy systems in the United States. The company's business model revolves around the design, development, installation, and maintenance of solar energy systems for residential customers. Sunrun differentiates itself by offering long-term agreements, typically spanning 20 to 25 years, which allows customers to utilize solar energy systems with minimal upfront costs. Additionally, Sunrun sells solar energy systems and related products, capitalizing on the growing demand for renewable energy solutions. 
Assessing Sunrun's Profitability
Despite its growth, Sunrun's profitability remains a concern, with a Profitability Rank of 4/10. The company's Operating Margin is currently at -34.53%, which, while better than 10.44% of 958 companies in the industry, indicates challenges in maintaining profitable operations. Sunrun's Return on Equity (ROE) stands at -18.61%, surpassing 13.82% of its peers, and its Return on Assets (ROA) at -6.07% is better than 19.07% of competitors. The Return on Invested Capital (ROIC) is -4.41%, outperforming 23.79% of similar companies. These figures suggest that while Sunrun has outperformed a portion of the industry, its profitability metrics are still in the negative territory, which is a potential red flag for investors.
Growth Trajectory of Sunrun Inc
Sunrun's Growth Rank is more promising at 6/10. The company has demonstrated a solid 3-Year Revenue Growth Rate per Share of 15.20%, which is better than 58.15% of 877 companies in the industry. Over a 5-year period, the Revenue Growth Rate per Share is 13.30%, surpassing 66.54% of its peers. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at 8.12%, which is more favorable than 46.58% of the industry. The 3-Year EPS without NRI Growth Rate is an impressive 56.20%, outperforming 79.46% of the industry. The EPS Growth Rate (Future 3Y To 5Y Est) is expected to be 25.84%, which is better than 89.13% of the industry. These growth metrics indicate that Sunrun has a strong potential for future expansion and profitability.
Notable Shareholders in Sunrun Inc
Among the notable shareholders of Sunrun, Jeremy Grantham (Trades, Portfolio) holds a significant stake with 14,182,106 shares, accounting for 6.51% of the company. Steven Cohen (Trades, Portfolio) follows with 3,050,722 shares, representing 1.4% ownership. Philippe Laffont (Trades, Portfolio) holds a smaller position with 165,576 shares, equating to 0.08% of Sunrun. These major investors' involvement provides a vote of confidence in the company's strategy and future prospects.
Competitive Landscape
When compared to its competitors, Sunrun Inc holds its ground with a market capitalization of $3.91 billion. NEXTracker Inc (NXT, Financial) is slightly behind with a market cap of $2.9 billion, while JinkoSolar Holding Co Ltd (JKS, Financial) and Shoals Technologies Group Inc (SHLS, Financial) have market caps of $1.72 billion and $2.69 billion, respectively. Sunrun's market position, coupled with its growth trajectory, suggests that it is a significant player within the semiconductors industry.
Investment Outlook for Sunrun Inc
In conclusion, Sunrun Inc's recent stock performance has been impressive, with substantial gains over the past week and three months. However, the company's current GF Valuation indicates that investors should exercise caution. While Sunrun's profitability metrics are not entirely favorable, its growth prospects appear robust, with strong revenue and EPS growth rates. The company's position in the industry, relative to its competitors, and the confidence shown by major shareholders like Jeremy Grantham (Trades, Portfolio), Steven Cohen (Trades, Portfolio), and Philippe Laffont (Trades, Portfolio), suggest that Sunrun may continue to capture market share and improve its financials. Investors should weigh these factors carefully when considering Sunrun Inc as a potential addition to their portfolios.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
