Monday Feb 06, 2023

Daily Stock Watch: Is Sunrun (NASDAQ: RUN) Stock a Good Investment? – Value the Markets


Sunrun has seen impressive customer growth over the past ten years. With electricity prices soaring, consumers are looking at ways to power their homes more cheaply than relying on the grid. Is RUN stock a good investment in this environment?

What is Sunrun?

Sunrun (NASDAQ: RUN) is the leading home solar, battery storage, and energy services company in the United States. It sells solar service offerings and installs solar energy systems for homeowners. Customers can access its products through direct-to-consumer, solar partnerships, and strategic partnerships.

Indeed, Sunrun is Ford’s recommended installer, and it’s also the biggest Tesla Powerwall certified installer.

Sunrun has a market cap above $7bn, and the RUN share price is up 2% year-to-date.

The company was founded by Edward H. Fenster, Robert N. Kreamer and Lynn M. Jurich in January 2007 and is headquartered in San Francisco, California. 

RUN Q2 Financial Results

Sunrun reported its Q2 2022 earnings on August 3 for the quarter ending June 30. Highlights include:

  • Surging demand drives record sales activity week in July

  • 33% Y/Y growth in Solar Energy Capacity Installed in Q2

  • Customer Additions of 34,403, bringing total Customers to 724,177 (21% Y/Y customer growth)

  • Guidance reiterated for the full year

  • Annual Recurring Revenue of $917m

  • Average Contract Life Remaining of 17.6 years

  • Net Earning Assets of $4.6bn, including $863m in Total Cash

  • Networked Solar Energy Capacity now over 5 Gigawatts

  • In the most recent quarter, Sunrun announced the launch of its new Level 2 electric vehicle (EV) charger to complement its home energy management solutions.

  • Sunrun’s partnership with Ford to serve as the preferred installer of Ford Intelligent Backup Power has officially launched, and Sunrun is taking orders for the installation of the 80-amp Ford Charge Station Pro and the Home Integration System along with providing options for solar and battery systems.

Mary Powell, Sunrun’s CEO, said:

We are laser focused on growing faster, better and stronger as we streamline how we deliver a world class experience for our customers while continuing to provide new product and technology offerings our customers can use to enrich and empower their lives with their own clean, abundant energy.

The proposed legislation currently being evaluated by Congress would turbocharge the transition we are facilitating for customers to a more secure, comfortable, and affordable way to power their lives.

Meanwhile, Danny Abajian, Sunrun’s CFO, commented: 

The Sunrun team continues to execute well, delivering significant growth in installations that exceeded our guidance, 

The adjustments we made to our offerings in response to higher input and capital costs earlier this year have been received well, and these changes are partially reflected in our higher Net Subscriber Value during Q2, and our outlook is for even higher Net Subscriber Value in Q3.

Sunrun is not due to report its next quarterly earnings until November. This will be covering fiscal Q3 ending September 2022.

For the next quarter, FactSet analyst consensus estimates peg EPS at -$0.08 and sales at $557.37m. 

How Does Sunrun Make Money?

Sunrun rents its solar panels to customers for …….


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