Amidst a volatile market, Sunrun Inc (RUN, Financial) has experienced a significant fluctuation in its stock price. With a current market capitalization of $3.13 billion, the company's shares are trading at $14.35. Over the past week, Sunrun's stock has seen a decline of 12.81%, yet when zooming out to the past three months, there's an impressive gain of 24.43%. This recent performance has caught the attention of investors, especially when considering the GF Value of $35.13, which suggests a potential undervaluation. However, the GF Valuation maintains a stance of "Possible Value Trap, Think Twice," consistent with the valuation from three months prior when the GF Value was at $43.55.
Introduction to Sunrun Inc
Sunrun Inc, operating within the semiconductors industry, is a leading player in residential solar energy systems in the United States. The company's business model revolves around the design, development, installation, and maintenance of solar energy systems for residential customers. Sunrun stands out by offering long-term agreements, typically spanning 20 to 25 years, for the use of its solar energy systems. Additionally, the company sells solar energy systems and related products, capitalizing on the growing demand for renewable energy solutions.
Assessing Sunrun's Profitability
When it comes to profitability, Sunrun Inc has a Profitability Rank of 4 out of 10. The company's operating margin stands at a concerning -34.53%, which, despite being better than 10.4% of 962 companies in the same industry, indicates challenges in maintaining profitable operations. The ROE is also in the negative territory at -18.61%, although it fares better than 13.57% of its peers. Similarly, the ROA and ROIC are -6.07% and -4.41% respectively, indicating that the company is not generating strong returns on its assets or invested capital. Over the past decade, Sunrun has managed to be profitable in 5 years, which is better than 33.59% of 905 companies in the industry. 
Growth Trajectory of Sunrun Inc
Sunrun's Growth Rank is a robust 7 out of 10. The company has demonstrated a solid 3-Year Revenue Growth Rate per Share of 15.20%, outperforming 57.44% of 874 companies. The 5-Year Revenue Growth Rate per Share is also strong at 13.30%, surpassing 66.32% of 769 companies. Looking ahead, the Total Revenue Growth Rate is estimated at 8.12% for the next 3 to 5 years, which is better than 58.57% of 140 companies. The 3-Year EPS without NRI Growth Rate is an impressive 56.20%, which is higher than 79.29% of 705 companies, and the future EPS Growth Rate is projected at 25.84%, outpacing 90% of 50 companies. These growth metrics suggest that Sunrun is on a positive trajectory, despite the current profitability challenges. 
Notable Shareholders in Sunrun Inc
Among the notable shareholders of Sunrun, Jeremy Grantham (Trades, Portfolio) holds a significant stake with 14,182,106 shares, representing 6.51% of the company. Steven Cohen (Trades, Portfolio) follows with 3,050,722 shares, accounting for 1.4%, and Philippe Laffont (Trades, Portfolio) holds a smaller position with 165,576 shares, equating to 0.08%. These prominent investors' involvement may provide a layer of confidence for potential investors considering Sunrun's stock.
Competitive Landscape
In comparison to its competitors, Sunrun Inc is positioned within a dynamic market. NEXTracker Inc (NXT, Financial) boasts a larger market cap of $6.23 billion, while JinkoSolar Holding Co Ltd (JKS, Financial) and Shoals Technologies Group Inc (SHLS, Financial) have market caps of $1.49 billion and $2.37 billion, respectively. These competitors highlight the competitive nature of the semiconductor industry, particularly in the renewable energy sector, where Sunrun is striving to maintain its foothold.
Investment Outlook for Sunrun Inc
In conclusion, Sunrun Inc's recent stock performance, with a notable 24.43% gain over the past three months, juxtaposed with a short-term loss of 12.81% over the past week, paints a complex picture for investors. The company's profitability metrics, while not stellar, are mitigated by its strong growth prospects. Sunrun's position in the semiconductor industry, particularly in the residential solar energy segment, is bolstered by its growth rates and the backing of significant shareholders. However, the repeated GF Valuation warning of a "Possible Value Trap" suggests that investors should approach with caution and conduct thorough due diligence. The future for Sunrun Inc appears promising, but it is not without its risks, and value investors would do well to weigh these factors carefully before making investment decisions.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
