Sunrun
RUN
$9.87
-3.24%
Sunrun Inc. is the leading US residential solar, storage, and energy services company, designing, installing, and maintaining solar energy systems for homeowners, primarily through long-term leases and power purchase agreements. As the largest player in the residential solar market, Sunrun differentiates itself through its vertically integrated model, owning and operating the systems it installs, which provides recurring revenue streams and a platform for cross-selling battery storage and grid services. The current investor narrative centers on the company's dramatic stock price decline amid a challenging macro environment for solar, characterized by high interest rates, policy uncertainty, and a sharp pullback in consumer demand, while the company simultaneously reports strong revenue growth and a return to profitability in its latest quarter, creating a debate about whether the market is pricing in a structural decline or a cyclical trough.…
RUN
Sunrun
$9.87
Investment Opinion: Should I buy RUN Today?
Based on the data, I rate Sunrun as a Hold. The consensus analyst recommendation is Buy with an average target of $18.84, implying 101% upside, but the severe technical downtrend and fundamental risks warrant caution. The thesis is that while the company has shown impressive revenue growth and a return to profitability, the high debt load, negative free cash flow, and macro headwinds create significant uncertainty that justifies a wait-and-see approach.
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RUN 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The company's strong revenue growth and return to profitability are positive, but the negative free cash flow and high leverage are significant concerns. The stock is trading at a deep discount to the industry, but this is justified by the financial risks. The analyst consensus is bullish, but the technical trend is bearish. The stance would be upgraded to bullish if the company achieves positive free cash flow and maintains revenue growth above 30%, or downgraded to bearish if the company misses earnings estimates or 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 $16.71 and implied upside of +69.3% versus the current price.
Average Target
$16.71
0 analysts
Implied Upside
+69.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$11 - $30
Analyst target range
The target price range spans from a low of $13.00 to a high of $30.00, with the high target implying a 220% upside, likely assuming a successful execution of the company's growth strategy and a recovery in the solar market, while the low target still suggests a 39% upside, indicating that even the most bearish analyst sees some value. The wide spread between the low and high targets (a 131% difference) reflects high uncertainty about the company's future, driven by factors such as interest rate sensitivity, regulatory changes, and the pace of adoption of solar and storage. Recent institutional ratings show no major upgrades or downgrades, with most firms maintaining their positions, suggesting that analysts are waiting for more clarity on the company's trajectory before adjusting their outlooks.
Bulls vs Bears: RUN Investment Factors
Sunrun presents a classic value-versus-value-trap debate. On the bull side, revenue growth is accelerating at 43% YoY, the company has returned to profitability, and the stock trades at a 57% discount to the industry PE, with analysts seeing 101% upside to the average target. On the bear side, the stock is in a severe downtrend, leverage is extreme (D/E 4.75), free cash flow is deeply negative, and macro headwinds from high interest rates and policy uncertainty are pressuring the entire solar sector. The most important tension is whether the recent profitability is sustainable or a result of one-time items and accounting adjustments; if earnings prove durable, the stock is deeply undervalued, but if the company needs to raise capital or demand continues to weaken, the downside could be substantial. Currently, the bear case has stronger evidence given the technical breakdown and cash burn, but the valuation and analyst targets suggest a favorable risk/reward for patient investors willing to tolerate volatility.
Bullish
- Revenue growth accelerating: Q1 2026 revenue surged 43.2% YoY to $722.2M, following a 123% jump in Q4 2025, indicating strong demand for solar and storage. This growth is driven by both customer agreements and product sales, with recurring revenue contributing $447.1M in Q1.
- Return to profitability: Q1 2026 net income was $167.6M (EPS $0.71), a dramatic turnaround from the prior year's loss, and the trailing PE of 9.39 is well below the industry average of 22x. The company has now posted positive net income in three of the last four quarters.
- Analyst upside potential: With a consensus Buy rating and an average target of $18.84, the stock offers 101% upside from the current price of $9.38. Even the lowest analyst target of $13.00 implies 39% upside, suggesting the market may be overly pessimistic.
- Improving operating efficiency: Operating margin improved from -22.8% in Q1 2025 to -6.0% in Q1 2026, and gross margin expanded to 30.4% from 19.6% a year ago. This demonstrates the company's ability to scale and manage costs effectively.
Bearish
- Severe stock price decline: The stock has fallen 52.9% over the past six months and 35.8% over the past three months, trading just 5.6% above its 52-week low of $8.61. This reflects deep market pessimism about the company's near-term prospects.
- High leverage and debt burden: Debt-to-equity is 4.75, and interest expense of $263.9M in Q1 2026 exceeded operating income, indicating significant financial risk. The company's high debt load makes it vulnerable to rising interest rates and cash flow pressures.
- Negative free cash flow: TTM free cash flow is -$750.6M, and the price-to-cash-flow ratio is -10.2, meaning the company is burning cash despite reporting accounting profits. This could force equity dilution or asset sales to fund operations.
- Macro headwinds for solar: High interest rates increase financing costs for solar leases, and policy uncertainty (e.g., changes to net metering and tax credits) has dampened consumer demand. The stock's beta of 2.39 amplifies sensitivity to these macro factors.
RUN Technical Analysis
Sunrun's stock is in a pronounced downtrend, with the price at $9.38 as of August 6, 2026, having fallen 52.9% over the past six months and 35.8% over the past three months, though it is up 3.4% over the past year. The current price sits at just 5.6% above its 52-week low of $8.61, and 58.2% below its 52-week high of $22.44, indicating the stock is trading near the bottom of its range, which often signals either a value opportunity or a falling knife, depending on the fundamental outlook. The 1-year change of +3.4% masks the severe drawdown from the February 2026 peak, highlighting that the stock has given back all its gains and is now testing multi-year support levels.
Beta
2.39
2.39x market volatility
Max Drawdown
-56.2%
Largest decline past year
52-Week Range
$9-$22
Price range past year
Annual Return
-16.7%
Cumulative gain past year
| Period | RUN Return | S&P 500 |
|---|---|---|
| 1m | -20.9% | +2.4% |
| 3m | -30.0% | +4.7% |
| 6m | -48.5% | +11.7% |
| 1y | -16.7% | +21.3% |
| ytd | -49.2% | +13.4% |
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RUN Fundamental Analysis
Sunrun's revenue has shown strong growth, with the most recent quarter (Q1 2026) reporting revenue of $722.2 million, a 43.2% year-over-year increase, and the prior quarter (Q4 2025) saw revenue of $1.16 billion, up from $518.5 million in Q4 2024, indicating accelerating growth. The company's revenue mix is shifting toward recurring customer agreements, which contributed $447.1 million in Q1 2026, while product sales (energy systems) added $212.2 million, and incentives and other revenue made up the remainder. This growth is driven by increased demand for solar and storage, but the company's operating margin remains negative at -6.0% in Q1 2026, though it improved from -22.8% in Q1 2025, reflecting better cost management and scale.
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 that Sunrun reported positive net income of $167.6 million in Q1 2026 and has a trailing PE of 9.39, I selected the PE ratio as the primary valuation metric, as it is the most relevant for profitable companies. The forward PE of 9.31 is nearly identical to the trailing PE, suggesting the market expects earnings to remain stable, which is unusual for a high-growth company and may indicate skepticism about the sustainability of recent profitability. Compared to the industry average PE of 22x (based on available data), Sunrun trades at a 57% discount, which could be justified by its high debt levels and negative free cash flow, but also presents a potential value opportunity if the company can maintain its earnings power.
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
Financial and operational risks are elevated. Sunrun carries a debt-to-equity ratio of 4.75, and interest expense of $263.9M in Q1 2026 exceeded operating income of -$43.5M, indicating that the company is not generating enough operating profit to cover its interest costs. The company's free cash flow is deeply negative at -$750.6M on a trailing twelve-month basis, and the price-to-cash-flow ratio of -10.2 underscores the cash burn. While the company reported positive net income of $167.6M in Q1, this was aided by a $290.3M pre-tax loss and a $7.1M tax benefit, suggesting that the earnings quality is questionable and may not be repeatable. Revenue concentration in the US residential solar market also exposes the company to regional policy changes and weather-related installation delays.
FAQ
The key risks of holding Sunrun include: 1) Financial risk: high debt-to-equity of 4.75 and negative free cash flow of -$750.6M, which could lead to dilution or liquidity issues. 2) Market risk: the stock has a beta of 2.39, making it highly sensitive to market movements, and the solar sector is facing headwinds from high interest rates and policy uncertainty. 3) Competitive risk: increased competition could pressure margins and market share. 4) Company-specific risk: the recent profitability may not be sustainable, as Q1 2026 net income included tax benefits and non-cash items. The most severe risk is a prolonged downturn in demand that forces the company to raise capital at depressed prices.
The 12-month forecast for Sunrun is uncertain, with three scenarios: a bull case (25% probability) targeting $18-$30, a base case (50% probability) targeting $13-$18, and a bear case (25% probability) targeting $8-$10. The base case assumes continued revenue growth and profitability, but with macro headwinds persisting. The most likely scenario is the base case, with the stock reaching the analyst average target of $18.84, implying 101% upside. However, the bear case is a real possibility given the negative cash flow and high debt. Investors should monitor the company's ability to generate positive free cash flow and sustain revenue growth.
Based on the trailing PE of 9.39, Sunrun is trading at a 57% discount to the industry average of 22x, suggesting it is undervalued. However, this discount is justified by the company's high leverage (D/E 4.75) and negative free cash flow. The forward PE of 9.31 is nearly identical to the trailing PE, indicating that the market expects earnings to remain stable, which is unusual for a high-growth company. The stock is also trading near its 52-week low, which could indicate a value opportunity or a value trap. Overall, the valuation appears cheap relative to peers, but the financial risks warrant caution.
Sunrun (RUN) is a high-risk, high-reward opportunity. The stock trades at $9.38, with analysts' average target of $18.84 implying 101% upside, and even the low target of $13.00 suggests 39% upside. However, the company has a debt-to-equity ratio of 4.75 and negative free cash flow of -$750.6M, which are significant red flags. The stock is suitable for investors with a high risk tolerance and a long-term horizon who believe in the solar industry's growth. For risk-averse investors, it may be better to wait for evidence of sustainable profitability and positive cash flow before buying.
Sunrun is more suitable for long-term investment than short-term trading, given its high volatility (beta 2.39) and the cyclical nature of the solar industry. The stock has fallen 52.9% in the past six months, making it risky for short-term traders. However, for long-term investors who believe in the secular growth of solar energy, the current valuation could offer a compelling entry point. The company's recurring revenue model and market leadership provide a foundation for long-term growth, but the high debt and negative cash flow require patience. A minimum holding period of 3-5 years is recommended to ride out the volatility and allow the company to achieve sustainable profitability.