RUN Stock Risk & Deep Value Analysis
Sunrun Inc
DVR Score
out of 10
What You Need to Know About RUN Stock
We analyzed Sunrun Inc using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran RUN through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
RUN Risk Analysis & Red Flags
What Could Go Wrong
Despite positive Q1 2026 revenue growth and cash generation outlook, if Sunrun fails to achieve its full-year 2026 Cash Generation guidance of $250M-$450M due to persistent high creation costs or lower-than-expected subscriber demand (which was noted as declining 25% YoY in a previous analysis), it could signal a return to problematic cash burn and significantly impair its ability to reduce debt or fund future growth.
Risk Matrix
Overall
Aggressive
Financial
High
Market
Medium
Competitive
High
Execution
Medium
Regulatory
High
Red Flags
- ⚠
Q1 2026 GAAP net loss of $297.3M despite positive net income to common stockholders, reflecting complexity in financial reporting due to noncontrolling interests.
- ⚠
Previous analysis noted a 25% YoY decline in new subscribers and rising creation costs; if unaddressed, these trends directly undermine growth and profitability, potentially impacting FY26 guidance.
- ⚠
Significant debt levels (not explicitly quantified in current research, but historically substantial) coupled with high capital intensity raise financial risk despite improved cash generation outlook.
Upcoming Risk Events
- 📅
Q2 2026 Earnings Miss (estimated late July/early August 2026): Failure to show progress towards the full-year $250M-$450M Cash Generation outlook or further decline in subscriber growth could lead to a significant stock price correction.
- 📅
Interest Rate Hike by the Federal Reserve (unspecified date in 2026/2027): An unexpected increase in interest rates could raise the cost of capital for Sunrun's project financing, negatively impacting project economics and margins by 50-100 basis points.
When to Reconsider
- 🚪
Exit if quarterly Cash Generation turns negative for two consecutive quarters after Q1 2026, or if the full-year 2026 guidance is significantly lowered (e.g., below $100M).
- 🚪
Sell if annual revenue growth decelerates below 10% YoY, indicating a loss of market momentum and inability to effectively grow the customer base.
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Investment Thesis
If Sunrun can consistently achieve its full-year 2026 Cash Generation guidance of $250M-$450M and beyond, driven by accelerating residential solar and battery storage deployments with improved subscriber growth and stable creation costs, then its current ~$3.64B market cap, trading at a low ~1.26x annualized P/S (based on Q1 2026 revenue) and ~10x FY26 cash generation, is poised for significant multiple expansion and re-rating as it de-risks its financial profile and establishes a clear path to becoming a dominant virtual power plant provider.
Is RUN Stock Undervalued?
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RUN Price Targets & Strategy
12-Month Target
$19.59
Bull Case
$32.00
Bear Case
$11.00
Valuation Basis
Based on 1.5x NTM Revenue, projecting ~$3.2B revenue for NTM and ~245M shares outstanding.
Entry Strategy
Dollar-cost average between $14.00 and $15.50 (near current levels, considering recent support).
Exit Strategy
Take 50% profit at $19.50 (12-month target), consider further profit-taking above $25.00. Stop-loss at $12.50 (below recent lows if cash flow guidance falters).
Portfolio Allocation
7% for aggressive risk tolerance, reflecting high-risk/high-reward profile.
Price Targets & Strategy
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Is RUN Financially Healthy?
Valuation
P/E Ratio
6.38
Price/Book
1.57
Price/Sales
1.99
Profitability
Gross Margin
32.07%
Operating Margin
-1.72%
Net Margin
17.88%
Return on Equity
18.33%
Revenue Growth
52.36%
EPS
$2.13
Balance Sheet
Current Ratio
1.66
Quick Ratio
1.15
Debt/Equity
4.71
Total Debt
$14.74B
Cash & Equivalents
$720.45M
Other
Beta (Volatility)
2.35
Does RUN Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable
Moat Sources
4 Identified
Sunrun's moat is primarily built on its scale, brand, and customer relationships locked into long-term contracts. While significant, the underlying hardware is largely commoditized, and intense pricing competition and regulatory shifts can challenge its durability.
Moat Erosion Risks
- •Intense pricing competition from new entrants or aggressive rivals (e.g., Tesla Energy) could erode margins and customer acquisition efficiency.
- •Adverse regulatory or policy changes at federal or state levels (e.g., changes to net metering policies) could significantly impact project economics and demand.
RUN Competitive Moat Analysis
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RUN Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral, driven by general interest in renewable energy and Sunrun's market leadership, but without clear real-time indicators.
Institutional Sentiment
Neutral. Analyst consensus is 'Moderate Buy' but Mizuho recently cut its price target from $25.00 to $22.00 (March 2, 2026), indicating some caution.
Insider Activity (Form 4)
No specific CEO/CFO buying or selling could be verified from the provided results for the last 90 days. Previous analysis noted insider selling, but this is not confirmed by current search.
Options Flow
Normal options activity, with no specific unusual trends verifiable from the provided research.
Earnings Intelligence
Next Earnings
Estimated early-August 2026 (for Q2 2026)
Surprise Probability
Medium
Historical Earnings Pattern
Stock typically reacts positively to strong revenue and EPS beats, especially when accompanied by improved cash flow guidance, as seen with Q1 2026 results.
Key Metrics to Watch
Competitive Position
Top Competitor
Tesla Energy
Market Share Trend
Stable as the market leader in residential solar, but previous analysis indicated a decline in new subscribers, suggesting potential share erosion or slower growth relative to the market.
Valuation vs Peers
Sunrun generally trades at a lower P/S ratio (~1.26x annualized Q1 2026 revenue) compared to some pure-play software or component providers in the renewable energy sector, reflecting its capital-intensive business model and project finance debt. However, this could also indicate undervaluation if cash flow improves significantly.
Competitive Advantages
- •Largest residential solar & storage installer in the US by scale and customer base.
- •Integrated home battery storage solutions and a strong attachment rate (73% noted in prior analysis).
- •Extensive sales and installation network, crucial for local execution and customer service.
Market Intelligence
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What Could Drive RUN Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings Report (estimated late July/early August 2026): If Cash Generation shows a positive trend and new subscriber additions stabilize or increase from previous declines, it will validate the FY26 guidance.
- •Q3 2026 Earnings Report (estimated late October/early November 2026): Confirmation of continued positive cash generation toward the $250M-$450M full-year target, alongside favorable updates on creation costs.
Medium-Term (6-18 months)
- •Major Virtual Power Plant (VPP) contract win in a key market (e.g., California, Texas) by mid-2027: Securing a multi-year VPP contract (e.g., >100MW capacity) with a large utility could add significant recurring revenue and margin visibility, driving re-rating.
- •New project financing vehicle or strategic partnership announcement by early 2028: A new, lower-cost financing structure or a partnership with a major financial institution could significantly reduce capital intensity and improve profitability by 100-200 basis points on margins.
Long-Term (18+ months)
- •Market Share Dominance in Home Energy Management (by 2030): If Sunrun's integrated residential solar, storage, and VPP offerings lead to a sustained 25%+ market share, annual revenue could exceed $10B with improved operating leverage, pushing market cap towards $30B+.
- •Grid Services Monetization (by 2030): Successful large-scale monetization of grid services through VPPs could unlock a new, high-margin revenue stream, potentially adding $500M-$1B annually and elevating valuation multiples.
Catalysts & Growth Drivers
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What's the Bull Case for RUN?
- ✓
Watch quarterly Cash Generation; a consistent positive trend and acceleration above $100M/quarter signals strong execution on guidance.
- ✓
Monitor new subscriber additions; a rebound from previous declines (e.g., +5% YoY or more) would indicate improved market penetration and competitive positioning.
Bull Case Analysis
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How Sunrun Inc Makes Money
Sunrun is the largest residential solar and battery storage provider in the United States, offering customized clean energy solutions to homeowners. The company primarily generates revenue by providing solar energy systems through long-term leases or power purchase agreements (PPAs), allowing customers to benefit from solar power with predictable monthly payments without the high upfront cost of ownership. Sunrun also sells solar systems directly and integrates home battery storage to enhance energy independence, resilience, and participate in emerging 'home-to-grid' virtual power plant initiatives.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Sunrun Inc (RUN)?
As of June 3, 2026, Sunrun Inc has a DVR Score of 7.3 out of 10, placing it in the "Solid Pick" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Sunrun Inc?
Sunrun Inc's market capitalization is approximately $3.6B..
What is the risk level for RUN stock?
Our analysis rates Sunrun Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of RUN?
Sunrun Inc currently has a price-to-earnings (P/E) ratio of 6.4. This is below the market average, which could indicate the stock is undervalued or facing headwinds.
Is Sunrun Inc's revenue growing?
Sunrun Inc has reported revenue growth of 52.4%. The company is showing strong top-line momentum.
Is RUN stock profitable?
Sunrun Inc has a profit margin of 17.9%. The company is profitable but margins are modest.
How often is the RUN DVR analysis updated?
Our AI-powered analysis of Sunrun Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on June 3, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for RUN (Sunrun Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.