Sunrun
RUN
$9.83
-3.53%
Sunrun Inc. is the leading provider of residential solar energy systems in the United States, designing, installing, and maintaining solar panels and battery storage for homeowners, primarily through long-term leases and power purchase agreements. As the largest residential solar company in the U.S., Sunrun differentiates itself through its vertically integrated model, owning the systems it installs and offering innovative financing options that lower upfront costs for customers. The current investor narrative centers on the company's dramatic turnaround, highlighted by a 43% year-over-year revenue surge in Q1 2026 and a return to profitability, yet the stock has faced severe headwinds, falling over 47% year-to-date amid concerns about high interest rates, policy uncertainty, and the sustainability of its growth. Analysts remain cautiously optimistic, with a consensus 'Buy' rating, but the wide divergence between the company's improving fundamentals and its depressed stock price underscores the intense debate over its future prospects.…
RUN
Sunrun
$9.83
Investment Opinion: Should I buy RUN Today?
Based on the analysis, I rate Sunrun as a Buy, driven by the company's strong Q1 2026 performance with 43% revenue growth and a return to profitability, which is not fully reflected in the stock price. The consensus analyst rating is 'Buy' with an average target of $16.39, implying a 60.8% upside, and the stock trades at a 57% discount to the industry P/E.
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RUN 12-Month Price Forecast
The AI assessment leans bullish due to the strong fundamental turnaround and attractive valuation. However, the high leverage and negative cash flow temper confidence. If the company can sustain growth and improve cash generation, the stock has significant upside. Key developments to watch include interest rate movements and quarterly earnings. A downgrade to neutral would occur if revenue growth falls below 20% 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 $16.39 and implied upside of +66.8% versus the current price.
Average Target
$16.39
0 analysts
Implied Upside
+66.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$11 - $30
Analyst target range
Analyst coverage is robust with 19 analysts, and the consensus recommendation is 'Buy' with a mean rating of 2.05 (where 1 is Strong Buy and 5 is Sell). The average target price is $16.39, implying a 60.8% upside from the current price of $10.19. The distribution of ratings is not provided, but the mean suggests a majority of Buy ratings. The high target of $30.00 implies a 194% upside, reflecting optimism about the company's growth potential and margin expansion, while the low target of $10.50 is just 3% above the current price, indicating that some analysts see limited upside. The wide range between the low and high targets (10.5 to 30) signals high uncertainty about the company's future, which is typical for a high-beta, capital-intensive business. Recent institutional ratings show a mix of actions, with Susquehanna maintaining a Positive stance, UBS and TD Cowen reiterating Buy, and GLJ Research consistently issuing Sell ratings, highlighting the divergence in opinion. The presence of a persistent Sell rating from GLJ Research suggests that some analysts remain skeptical of the company's ability to sustain its turnaround, while the overall consensus remains bullish.
Bulls vs Bears: RUN Investment Factors
Sunrun presents a classic high-risk, high-reward investment scenario. The bull case is anchored by a 43% revenue surge, a return to profitability, and a valuation that is 57% below the industry average P/E. However, the bear case is equally compelling, with a 47% YTD decline, a debt-to-equity ratio of 4.75, and negative free cash flow of -$750.6 million. The most critical tension is whether the company's operational turnaround can overcome the financial leverage and macro headwinds of high interest rates. Currently, the evidence slightly favors the bulls given the strong Q1 results and analyst consensus, but the risk is substantial. The stock's fate hinges on sustaining growth and improving cash flow in a challenging rate environment.
Bullish
- Revenue Surged 43% YoY in Q1 2026: Q1 2026 revenue reached $722.2 million, a 43.2% year-over-year increase, following a record Q4 2025 with $1.16 billion. This acceleration indicates strong demand for residential solar and successful execution of the growth strategy.
- Return to Profitability with Positive EPS: The company reported net income of $167.6 million in Q1 2026, with diluted EPS of $0.62, a sharp turnaround from the $2.8 billion loss in Q4 2024. This profitability shift is a critical milestone that supports the bull case.
- Trading at 57% Discount to Industry P/E: With a trailing P/E of 9.39 versus the industry average of 22x, Sunrun is significantly undervalued on an earnings basis. This discount could reflect market skepticism but also offers substantial upside if the market re-rates the stock.
- Analyst Consensus Buy with 61% Upside: The average analyst target price is $16.39, implying a 60.8% upside from the current price of $10.19. With 19 analysts and a mean rating of 2.05, the consensus is bullish, suggesting that the sell-off may be overdone.
Bearish
- Stock Down 47% YTD Amid High Rates: The stock has fallen 47.6% year-to-date, underperforming the S&P 500 by 61.4 percentage points. High interest rates increase financing costs for solar leases, pressuring margins and demand.
- High Debt-to-Equity Ratio of 4.75: Sunrun's debt-to-equity ratio of 4.75 indicates significant leverage, which amplifies financial risk. Interest expenses of $263.9 million in Q1 2026 consumed a large portion of revenue, limiting profitability.
- Negative Free Cash Flow of -$750.6M: Trailing twelve-month free cash flow is negative at -$750.6 million, indicating the company is burning cash to fund growth. This raises concerns about long-term sustainability and potential dilution.
- Volatile Quarterly Earnings Pattern: EPS swung from $1.22 in Q2 2025 to $0.07 in Q3 2025 and then to $0.45 in Q4 2025, showing high volatility. This unpredictability makes it difficult for investors to rely on consistent earnings growth.
RUN Technical Analysis
Sunrun's stock is in a pronounced downtrend, with the price at $10.19 as of August 14, 2026, down 46.6% over the past six months and 27.2% over the past three months. The stock is trading near the bottom of its 52-week range, at approximately 11% above the low of $8.61 and 55% below the high of $22.44. This positioning near the lows suggests a market that is pricing in significant pessimism, but also potential value if the company's turnaround gains traction. The 1-year price change is -2.8%, indicating that the stock has given back all gains from earlier in the period, reflecting a sharp reversal from its highs.
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
-29.4%
Cumulative gain past year
| Period | RUN Return | S&P 500 |
|---|---|---|
| 1m | -17.0% | +4.0% |
| 3m | -25.4% | +5.3% |
| 6m | -51.2% | +12.6% |
| 1y | -29.4% | +20.1% |
| ytd | -49.4% | +13.3% |
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RUN Fundamental Analysis
Sunrun's revenue trajectory has been volatile but recently accelerated sharply. In Q1 2026, revenue surged to $722.2 million, a 43.2% year-over-year increase, following a record Q4 2025 with $1.16 billion in revenue. However, the quarterly trend shows significant fluctuation, with Q2 2025 revenue at $569.3 million and Q3 2025 at $724.6 million, indicating that growth is not linear. The revenue mix is shifting, with Customer Agreements (recurring revenue) at $447.1 million and Energy Systems (one-time sales) at $212.2 million, highlighting the company's focus on long-term contracts. This growth is a positive sign, but the sustainability of such high growth rates is uncertain given the volatile quarterly pattern.
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, the trailing P/E ratio of 9.39 is the most relevant valuation metric. The forward P/E of 10.33 is slightly higher, suggesting that the market expects earnings to remain stable or slightly decline, which is unusual for a growth company. The PEG ratio is negative at -0.08, indicating that the market does not expect significant earnings growth, or that the growth is not reflected in the ratio due to negative earnings in the past. Compared to the industry average P/E of 22x (from valuation data), Sunrun trades at a 57% discount, which could signal undervaluation or reflect higher risk. Historically, Sunrun's P/E has ranged from 4.77 to 61.75 over the past year, and the current 9.39 is near the lower end, suggesting the stock is trading at a valuation that has historically been associated with trough earnings.
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 risks are pronounced. Sunrun's debt-to-equity ratio of 4.75 indicates heavy leverage, and interest expenses of $263.9 million in Q1 2026 represented 36.5% of revenue, squeezing profitability. The company's negative free cash flow of -$750.6 million over the trailing twelve months signals a cash burn that could necessitate further debt or equity issuance, potentially diluting shareholders. Additionally, the volatile earnings pattern, with EPS swinging from $1.22 to $0.07 in consecutive quarters, underscores the unpredictability of its financial performance.
FAQ
The key risks are: 1) Financial risk from high leverage (debt-to-equity of 4.75) and negative free cash flow of -$750.6 million, which could lead to dilution or financial distress. 2) Market risk from high interest rates, which increase financing costs and reduce demand for solar leases. 3) Competitive risk from other solar providers and utilities. 4) Company-specific risk from volatile earnings, as seen in the swing from $1.22 EPS in Q2 2025 to $0.07 in Q3 2025. The most severe risk is a prolonged high-rate environment that could push the stock to its 52-week low of $8.61 or lower.
The 12-month forecast is based on three scenarios: Bull case (30% probability) targets $16.39 to $30.00, driven by rate cuts and sustained growth. Base case (45% probability) targets $12.00 to $16.39, assuming moderate growth and stable rates. Bear case (25% probability) targets $8.61 to $10.50, if high rates persist and growth decelerates. The most likely scenario is the base case, with the stock trading around $14, reflecting a gradual recovery. The key assumption is that the company maintains revenue growth above 20% and improves cash flow.
Based on the trailing P/E of 9.39, Sunrun is trading at a 57% discount to the industry average of 22x, suggesting it is undervalued. The forward P/E of 10.33 is also low, indicating the market expects earnings to remain stable. The PEG ratio is negative at -0.08, which is unusual and reflects the company's volatile earnings history. Historically, the P/E has ranged from 4.77 to 61.75, and the current level is near the lower end, implying that the market is pricing in significant pessimism. This valuation suggests that the market expects limited growth or high risk, but if the company delivers on its growth potential, the stock could re-rate higher.
Sunrun presents a compelling risk/reward opportunity. With a trailing P/E of 9.39, a 57% discount to the industry average, and a 60.8% upside to the analyst average target of $16.39, the stock appears undervalued. However, the high debt-to-equity ratio of 4.75 and negative free cash flow of -$750.6 million introduce significant risk. For investors with a high risk tolerance and a long-term horizon, it could be a good buy, but only if they are prepared for potential volatility. The stock is not suitable for conservative investors or those seeking stable income.
Sunrun is better suited for long-term investment, given its high beta of 2.386 and volatile earnings. Short-term trading is risky due to the stock's sensitivity to interest rate news and quarterly earnings surprises. The company's recurring revenue model and growth potential suggest that a holding period of at least 3-5 years could allow the turnaround to fully materialize. However, investors must be prepared for significant drawdowns, as the stock has shown a max drawdown of -56.19%. For those with a high risk tolerance and a long-term perspective, Sunrun could offer substantial upside, but it is not appropriate for short-term traders seeking stability.