Sunrun Inc (RUN, Financial), a prominent player in the semiconductor industry, has recently showcased a notable performance in the stock market. With a current market capitalization of $3.32 billion and a recent price surge, the company's stock price has climbed to $14.99. Over the past week alone, Sunrun has seen a 14.47% increase in its stock price, and over the last three months, the stock has gained an impressive 13.26%. Despite these gains, the current GF Value of $26 suggests a potential overvaluation, urging investors to think twice as the stock might be a possible value trap, consistent with the valuation from three months ago at $30.8.
Overview of Sunrun Inc
Sunrun Inc specializes in the design, development, installation, sale, ownership, and maintenance of residential solar energy systems across the United States. The company operates by acquiring customers directly or through partnerships, maintaining ownership of the installed solar systems. Customers typically engage with Sunrun through long-term agreements spanning 20 to 25 years. Besides its primary services, Sunrun also sells solar energy systems and related products. This business model highlights Sunrun's integrated approach in the renewable energy sector, aiming to capitalize on the growing demand for sustainable energy solutions.
Assessing Sunrun's Profitability
Sunrun's financial health, as indicated by its Profitability Rank of 4/10, shows challenges despite its market activities. The company's operating margin stands at -36.47%, which is better than 12.09% of 984 companies in the same sector. Its Return on Equity (ROE) and Return on Assets (ROA) are -24.96% and -7.15% respectively, positioning Sunrun better than a small fraction of its peers. The Return on Invested Capital (ROIC) is also low at -4.12%, yet it outperforms 26.71% of its competitors. These figures reflect a company that, while struggling with profitability, still manages to outperform a significant number of competitors in a highly competitive industry.
Growth Trajectory of Sunrun
The Growth Rank of Sunrun is impressive at 8/10. The company has demonstrated a robust 3-Year Revenue Growth Rate per Share of 16.40%, surpassing 70.75% of 923 companies in its sector. Its 5-Year Revenue Growth Rate per Share also stands strong at 11.50%. Looking ahead, the estimated Total Revenue Growth Rate for the next 3 to 5 years is 9.14%, which is better than 20.37% of companies in a similar category. However, the 3-Year EPS without NRI Growth Rate shows a decline of 19.00%, although it still ranks better than 22.49% of its peers. The future EPS Growth Rate is expected to rebound to 14.21%, indicating potential for recovery and profitability.
Significant Shareholders and Market Position
Notable investors in Sunrun include Jeremy Grantham (Trades, Portfolio) holding 14,626,019 shares (6.6%), George Soros (Trades, Portfolio) with 2,080,941 shares (0.94%), and Steven Cohen (Trades, Portfolio) who owns 2,071,138 shares (0.93%). These significant holdings underscore the confidence some market gurus have in Sunrun's business model and future prospects.
Competitive Landscape
Sunrun operates in a competitive environment with key players like NEXTracker Inc (NXT, Financial) with a market cap of $7.38 billion, JinkoSolar Holding Co Ltd (JKS, Financial) valued at $1.18 billion, and Shoals Technologies Group Inc (SHLS, Financial) at $1.11 billion. This competitive analysis is crucial as it highlights the varying scales of operation and market capitalization within the industry, providing a broader context to Sunrun's performance and strategic positioning.
Conclusion
In conclusion, Sunrun Inc's recent stock performance has been impressive, reflecting a strong market presence and growth potential despite its profitability challenges. The company's strategic focus on expanding its residential solar energy solutions, coupled with significant investments from notable market players, positions it well for future growth. However, the current valuation suggests caution, as the market might be overestimating its short-term growth prospects. Investors should closely monitor Sunrun's profitability metrics and competitive stance in the evolving renewable energy market.
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.
