This report is an updated version of the report published on 28 January 2025 at 3:55 PM EST.

Sunrun Inc. (NASDAQ: RUN)  

RUN provides residential solar energy systems and services in the United States. The company designs, develops, installs, and maintains solar energy systems for homeowners.

Upcoming Event: On 27 February 2025, after the market closes, RUN will release its fourth quarter and full year 2024 earnings report.

Recommendation Rationale – SELL at USD 10.20 

• Financial Highlights: RUN's total revenue decreased by 4.62% YoY, reaching USD 537.17mn in 3QFY24, compared to USD 563.18mn in 3QFY23. This decline was attributed to lower revenue from customer agreements, incentives, and solar energy systems and product sales. Additionally, net cash provided by financing activities dropped by 8.15% YoY, totalling USD 2,439.19mn in 3QFY24, down from USD 2,655.67mn in 3QFY23.

• Trading Near the Resistance: RUN’s share price is approaching its R1 level recommended on 15 December 2024. Therefore, share price can face resistance at the current levels.

• Overvalued Multiples: On a forward 12-month basis – key trading multiples (EV/Sales, EV/EBITDA) are higher than the median of Energy sector.

• Market Risk: RUN operates in a highly competitive market, which can impact its market share and profitability. Additionally, the company’s performance is closely tied to government policies and incentives related to solar energy. Changes in these regulations can significantly impact on their business.

RUN’s Daily Price Chart

Valuation Methodology: EV/Sales Approach (FY December'25E) (Illustrative)

RUN is expected to trade at premium based on cash generation guidance for FY25, expected storage capacity installations in FY25, expected solar energy capacity installations in FY25, and forecasted growth in net subscriber value. For conducting the valuation, the following peers have been considered: NeoVolta Inc (NASDAQ: NEOV), Eos Energy Enterprises Inc (NASDAQ: EOSE), Amprius Technologies Inc (NYSE: AMPX), and others have been considered.

Considering the current trading levels, risks associated, and volatile market conditions on the back of higher interest rates, a ‘Sell’ rating is assigned to the ‘RUN’ at the current market price of USD 10.20 as of Jan 28, 2025 (11: 20 am EST).

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 28 January 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.