Sunrun
RUN
$8.89
-0.45%
Sunrun Inc. is a leading provider of residential solar energy systems in the United States, offering design, installation, and maintenance services, primarily through long-term agreements (20-25 years) and direct sales. As the largest residential solar installer in the U.S., Sunrun differentiates itself through its vertically integrated model, owning and operating solar systems while leveraging strategic partnerships. The current investor narrative centers on the company's dramatic stock decline amid high interest rates, policy uncertainty, and a challenging demand environment, despite recent quarterly revenue growth and profitability improvements. The market is debating whether Sunrun's asset-heavy model can sustain growth and generate positive cash flow in a higher-for-longer rate environment.…
RUN
Sunrun
$8.89
Investment Opinion: Should I buy RUN Today?
Based on the analysis, Sunrun is rated a 'Hold' with a cautious outlook. The consensus analyst rating is 'Buy' with an average target price of $15.97, implying an 81.9% upside, but the stock's high risk profile and negative free cash flow warrant a more conservative stance. The thesis is that Sunrun has strong growth potential, but the execution risk is high, and the stock is likely to remain volatile until the company demonstrates sustained profitability.
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RUN 12-Month Price Forecast
The AI assessment is neutral with medium confidence. Sunrun's strong revenue growth and margin improvement are positive, but the negative free cash flow and high leverage are significant concerns. The stock's low valuation and analyst upside suggest potential, but the risk of further downside is elevated. The stance would upgrade to bullish if the company achieves positive free cash flow and the stock breaks above its 50-day moving average. It would downgrade to bearish if revenue growth decelerates or if the company announces a dilutive capital raise.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Sunrun's 12-month outlook, with a consensus price target around $15.97 and implied upside of +79.7% versus the current price.
Average Target
$15.97
0 analysts
Implied Upside
+79.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$10 - $30
Analyst target range
Sunrun has coverage from 19 analysts, with a consensus recommendation of 'Buy' (mean rating 2.0). The average target price is $15.97, implying an upside of 81.9% from the current price of $8.78. The distribution includes 10 Buy/Overweight ratings, 1 Hold, and 1 Sell (from GLJ Research), indicating a bullish tilt. The target range is wide, from a low of $10.00 to a high of $30.00, reflecting high uncertainty. The low target suggests a modest 13.9% upside, while the high target implies a 241.7% upside, likely assuming a recovery in demand and improved margins. Recent ratings actions show a mix: Susquehanna reaffirmed Positive, UBS and TD Cowen reiterated Buy, while GLJ Research maintained Sell, and Barclays held Equal Weight. The wide spread and mixed actions indicate that analysts are divided on the stock's prospects, with bulls seeing a turnaround and bears concerned about leverage and cash burn.
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Bulls vs Bears: RUN Investment Factors
Sunrun presents a classic high-risk, high-reward scenario. The bull case is anchored by strong revenue growth, improving margins, and a low valuation, while the bear case is dominated by extreme leverage, negative free cash flow, and a deteriorating stock price. Currently, the bearish evidence is stronger given the stock's proximity to its 52-week low and the company's heavy reliance on external financing. The most critical tension is whether Sunrun can achieve sustained profitability and positive free cash flow in a higher-for-longer rate environment, which would validate the bull thesis and drive a re-rating. If the company can demonstrate consistent cash generation, the stock could see significant upside, but failure to do so could lead to further downside.
Bullish
- Strong Revenue Growth: Q1 2026 revenue surged 43.2% YoY to $722.2M, driven by a 26.8% increase in Customer Agreements and Service revenues, indicating robust demand for recurring solar subscriptions. This growth outpaces the broader solar industry, which is facing headwinds from high interest rates.
- Improving Profitability: Gross margin expanded to 30.4% in Q1 2026 from 16.6% in Q2 2025, reflecting better cost management and scale. Net income turned positive at $167.6M (23.2% net margin) in Q1 2026, a stark contrast to the net loss of -$175.1M in Q4 2025, signaling a potential inflection in earnings power.
- Low Valuation Multiples: Trailing PE of 9.39x and forward PE of 8.65x are at the low end of historical ranges, while PS ratio of 1.45x is well below its historical average of 6-8x. This suggests the market is pricing in pessimistic expectations, offering a potential margin of safety if the company executes.
- Analyst Consensus Bullish: With a consensus 'Buy' rating and an average target price of $15.97, analysts see 81.9% upside from the current price of $8.78. The high target of $30.00 implies a 241.7% upside, reflecting confidence in a demand recovery and margin expansion.
Bearish
- Extreme Leverage: Debt-to-equity ratio of 4.75x is extremely high, and interest expense of $263.9M in Q1 2026 exceeds operating income, indicating that the company is heavily reliant on debt financing. This leverage amplifies financial risk, especially in a rising rate environment.
- Negative Free Cash Flow: Free cash flow was -$414.2M in Q1 2026, with TTM FCF of -$750.6M, reflecting the capital-intensive nature of solar installations. The company must continuously access capital markets to fund growth, which could lead to dilution or increased debt.
- Stock in Downtrend: The stock is down 46.4% over the past year and 54.8% YTD, trading just 1.9% above its 52-week low of $8.61. The persistent downtrend and weak relative strength (RS -64.9% vs SPY) indicate strong selling pressure and a lack of buyer conviction.
- High Beta and Volatility: With a beta of 2.386, the stock is highly sensitive to market movements and interest rate changes. The max drawdown of -58.99% over the past year highlights the significant downside risk, and the short ratio of 6.82 suggests elevated bearish sentiment.
RUN Technical Analysis
Sunrun's stock is in a pronounced downtrend, with a 1-year price change of -46.37% and a 6-month change of -33.74%. The current price of $8.78 is near the 52-week low of $8.61, representing only 1.9% above the low and 60.9% below the 52-week high of $22.44. This positioning near the lows suggests persistent selling pressure and a lack of buyer conviction, as the stock has failed to hold any meaningful support levels over the past year. The 52-week range positioning indicates the market is pricing in significant fundamental deterioration, and the stock is trading at the lower end of its historical band, which could attract value investors but also signals a falling knife risk.
Beta
2.36
2.36x market volatility
Max Drawdown
-60.9%
Largest decline past year
52-Week Range
$8-$22
Price range past year
Annual Return
-45.9%
Cumulative gain past year
| Period | RUN Return | S&P 500 |
|---|---|---|
| 1m | -15.3% | -0.4% |
| 3m | -33.4% | +4.5% |
| 6m | -21.6% | +13.9% |
| 1y | -45.9% | +19.0% |
| ytd | -54.3% | +12.9% |
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RUN Fundamental Analysis
Sunrun's revenue trajectory shows strong growth, with Q1 2026 revenue of $722.2 million, up 43.2% year-over-year, following a sequential increase from $569.3 million in Q2 2025. However, this growth is inconsistent, as Q4 2025 revenue was $1.16 billion, a spike likely due to timing, while Q3 2025 was $724.6 million. The company's revenue segments show a mix: Customer Agreements and Service revenues (recurring) totaled $467.8 million and $447.1 million respectively, while Energy Systems (product sales) contributed $212.2 million, indicating a shift toward recurring revenue streams. Despite the top-line growth, the company's profitability is mixed, with Q1 2026 net income of $167.6 million (net margin 23.2%) versus a net loss in Q4 2025 of -$175.1 million, and gross margin improved to 30.4% in Q1 2026 from 16.6% in Q2 2025, but operating margin remains negative at -6.0% in Q1 2026, reflecting high operating expenses. The balance sheet shows high leverage with a debt-to-equity ratio of 4.75, and free cash flow is deeply negative at -$414.2 million in Q1 2026, with a TTM FCF of -$750.6 million, indicating heavy reliance on external financing to fund its capital-intensive solar installations.
Quarterly Revenue
$722231000.0B
2026-03
Revenue YoY Growth
+43.2%
YoY Comparison
Gross Margin
30.4%
Latest Quarter
Free Cash Flow
$-750573000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is RUN Overvalued?
Given Sunrun's positive trailing net income (EPS of $0.71 in Q1 2026), the PE ratio is the primary valuation metric. The trailing PE is 9.39x, while the forward PE is 8.65x, implying the market expects earnings to grow slightly, but the low absolute multiple suggests skepticism about earnings sustainability. Compared to the industry average PE (not provided), Sunrun's PE appears low, but this is likely due to the cyclical and capital-intensive nature of the solar industry, where earnings are volatile. Historically, Sunrun's PE has ranged from negative to over 60x, with the current 9.39x near the lower end of its historical band, indicating the market is pricing in pessimistic expectations. The PS ratio of 1.45x is also low relative to its historical average of around 6-8x, further confirming a de-rating. The EV/Sales of 5.30x is higher than the PS ratio due to significant debt, reflecting the company's high leverage.
PE
9.4x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 2x~20x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
8.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financially, Sunrun's high debt-to-equity ratio of 4.75x and negative free cash flow of -$750.6M TTM pose significant risks. The company's interest expense of $263.9M in Q1 2026 exceeds its operating income, indicating that it is not covering its debt obligations from operations. This reliance on external financing makes the company vulnerable to credit market conditions and could lead to dilution or financial distress if access to capital tightens. Additionally, the company's revenue is concentrated in the U.S. residential solar market, which is sensitive to interest rates and policy changes, creating earnings volatility.
