Sunrun Inc (RUN, Financial), a prominent player in the U.S. residential solar energy sector, has experienced a notable 37.28% increase in its stock price over the past three months, settling at $18.4. Despite this impressive quarterly surge, the stock has seen a slight decline of 1.67% in the past week. The current GF Value of $26.11 suggests a potential undervaluation, urging investors to think twice as it indicates a possible value trap, consistent with past evaluations.
Overview of Sunrun Inc
Sunrun Inc specializes in the design, development, installation, and maintenance of residential solar energy systems across the United States. The company not only constructs these systems but also retains ownership, offering them to customers through long-term agreements ranging from 20 to 25 years. Additionally, Sunrun sells solar energy systems and related products directly to consumers. This comprehensive approach has positioned Sunrun as a leader in the renewable energy sector.
Assessing Sunrun's Profitability
Despite its industry leadership, Sunrun's Profitability Rank stands at 4/10, reflecting below-average profitability within its sector. The company's Operating Margin is currently at -36.47%, which, although low, still outperforms 12.13% of its 981 industry peers. In terms of return metrics, Sunrun's ROE and ROA are -24.96% and -7.15% respectively, positioning it ahead of many competitors in the industry. The company has managed to be profitable in 5 out of the past 10 years, showcasing its resilience amidst challenging market conditions.
Growth Trajectory of Sunrun
Sunrun's Growth Rank is an impressive 8/10, indicating strong future growth prospects. The company has demonstrated a robust 3-Year Revenue Growth Rate per Share of 16.40%, significantly outperforming 70.5% of its peers. Looking ahead, Sunrun is expected to maintain a healthy Total Revenue Growth Rate of 9.06% over the next 3 to 5 years. However, its 3-Year EPS without NRI Growth Rate stands at -19.00%, with future estimates promising a substantial improvement to 20.21%.
Key Stakeholders in Sunrun
Notable investors in Sunrun include Jeremy Grantham (Trades, Portfolio) holding 6.6% of shares, George Soros (Trades, Portfolio) with 0.94%, and Steven Cohen (Trades, Portfolio) closely following at 0.93%. These major shareholders underscore the confidence and significant investment interest in Sunrun's business model and future prospects.
Competitive Landscape
Sunrun faces stiff competition within the solar energy sector. Its closest competitors include NEXTracker Inc (NXT, Financial) with a market cap of $6.11 billion, JinkoSolar Holding Co Ltd (JKS, Financial) at $1 billion, and Shoals Technologies Group Inc (SHLS, Financial) valued at approximately $968.838 million. These companies represent a diverse range of capabilities and market positions, challenging Sunrun to continuously innovate and improve its offerings.
Conclusion
In conclusion, Sunrun Inc's recent stock performance and growth trajectory present a mixed landscape of opportunities and challenges. While the company shows strong growth potential and has significant backing from major investors, its profitability metrics and current valuation suggest caution. Investors should weigh these factors carefully when considering Sunrun as a potential addition to their portfolios, keeping in mind both the short-term fluctuations and long-term growth prospects 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.
