A Look at Sunrun's (RUN) Valuation Following Strong Earnings and Upgraded Analyst Outlooks

Sunrun (RUN) is drawing renewed attention from investors after reporting greater than 8% year-over-year revenue growth, surpassing expectations and achieving record high metrics in storage attachment and value creation. Investor enthusiasm has increased as positive updates from major analysts add momentum.

See our latest analysis for Sunrun.

After climbing to a 52-week high on upbeat earnings and fresh optimism from Wall Street, Sunrun’s share price has surged over 75% in the past three months and is up a striking 84% year-to-date. Still, the 1-year total shareholder return stands at just 20%. Even with this recent momentum, the longer-term performance picture remains mixed.

If strong clean energy stories like Sunrun's have you watching for momentum, now is a great time to uncover opportunities among fast growing stocks with high insider ownership.

With so much bullish sentiment already reflected in the recent rally, investors are left to wonder whether Sunrun is still undervalued at current levels or if the market has already priced in its future growth prospects.

Most Popular Narrative: 9% Overvalued

Sunrun closed at $18.80, slightly above the narrative fair value of $17.18. This suggests that optimism in the market may have outpaced the most widely followed projections. The narrative’s fair value is based on detailed analyst expectations and incorporates key policy and profitability factors shaping Sunrun’s outlook.

“Sunrun is rapidly scaling its storage and grid services offerings, enrolling a growing portion of its customer base (currently around 35% of 200,000 batteries, aiming for 10 GWh of dispatchable energy by 2029). This enables significant recurring revenue growth and expanded margin opportunities as demand for grid support rises. This will positively impact long-term revenue and net margins.”

Read the complete narrative.

Want to see what’s driving this fair value? The real story weaves record growth, margin breakthroughs, and future profitability into a bold forecast. Discover which numbers and projections fuel this valuation. Click through and unlock the thinking behind the market’s hottest target now.

Result: Fair Value of $17.18 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory uncertainty and the possible expiration of key solar tax credits could quickly temper Sunrun’s growth story and present challenges to its profitability outlook.

Find out about the key risks to this Sunrun narrative.

Another View: Putting Valuation in Context

Looking beyond the narrative benchmark, Sunrun's current price-to-sales ratio of 2x is right in line with its estimated fair ratio and closely matches the US Electrical industry average of 2.1x. There is little buffer if sentiment turns, yet the stock also does not appear over-extended relative to peers. Could this “just right” valuation pose its own risks or set up an opportunity if the story changes?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Sunrun Narrative

If you think the story isn't finished or want to draw your own conclusions from the latest facts and figures, you can easily build your own perspective right now in just a few minutes, starting with Do it your way.

A great starting point for your Sunrun research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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