Sunrun (NASDAQ:RUN) brought out a mixed earnings report yesterday, which featured a quarterly loss to earnings but a win in revenue. This was, combined with newly-raised projections about future growth rates, sufficient to send Sunrun up 8.4% in overnight trading. Better yet, Sunrun has held onto those gains going into this morning's trading and can point to several factors likely to contribute to continued growth, a point that several financial analysts seem to agree with.
A Mixed but Decent Earnings Report
The Sunrun earnings report led off with a quarterly loss of $0.11 per share, which was down against at least some expectations, particularly the Zacks consensus of a loss of $0.03 per share. It does, however post an improvement against the same time last year, when Sunrun posted a loss of $0.23 per share.
Revenue proved to be a different story. Sunrun posted revenue of $334.79 million for the quarter ending March 2021, which not only beat Zacks consensus by 6.82%, but also beat the previous year's revenue figures by over 50%. The previous year's revenue for the quarter was $210.73 million.
Perhaps the strongest point for Sunrun, though, came with it raising the projected growth rate. Previously, the company expected growth between 20% and 25%. The revised totals now look for growth between 25% and 30%, as based on several factors including improving overall brand strength, a greater customer value, and several key competitive advantages including its talent brand.
Even the larger environment is seen as helpful; an aging power grid coupled with rising numbers of high-profile power outages like those seen in Texas has led to Sunrun installing a total of roughly 20,000 Brightbox systems in the US. Brightbox systems offer protection against multi-day outages, offering customers ready access to energy even without the power grid available.
How do Financial Analysts Feel About Sunrun Stock?
Sunrun solar systems have proven their worth for homeowners of late, as demonstrated by increasing installation numbers, and financial analysts have been responding accordingly. Our latest research suggests increasing bullishness in a pattern that's been on the rise for the last year.
A year ago, Sunrun had eight “buy” recommendations to its credit, along with one “hold” rating. Today, Sunrun has more than double the “buy” recommendations at 18, but only two “hold” ratings.
Price targets exist in a fairly broad range; the current average is $80.85, with a high of $116 and a low of $55. Given that even the low price target is above the current share price of $45.22, it suggests a substantial upside potential.
Goldman Sachs recently issued a note to clients that called Sunrun a “bellwether” solar company, with an expectation of further rally to come. The analyst also repeated its previously-established “buy” rating on Sunrun. The most recent analyst figures mostly supplement Goldman's outlook, as in April alone, Royal Bank of Canada and Evercore ISI both initiated coverage of Sunrun at “outperform”. Royal Bank of Canada offered a price target of $81, while Evercore set its target at $87. The one dissenter in recent figures was Barclays, which lowered its price target on Sunrun down to $90 from its original $108.
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