Jefferies analyst Julien Dumoulin-Smith has adjusted the price target for Sunrun (RUN, Financial), lowering it from $7 to $6 while maintaining a Hold rating on the stock. This decision comes as the firm anticipates potential changes in the Senate related to the Inflation Reduction Act (IRA), with particular attention on whether the cut-off for residential leases scheduled for 2026 will be addressed.
The firm suggests that if the Senate acts, Sunrun might effectively leverage a strategic safe harbor to extend its investment tax credit timeline. However, Jefferies urges investors to remain vigilant for upcoming updates regarding IRA amendments, with expectations of ongoing stock volatility in the near term.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for Sunrun Inc (RUN, Financial) is $12.04 with a high estimate of $20.00 and a low estimate of $4.00. The average target implies an upside of 67.41% from the current price of $7.19. More detailed estimate data can be found on the Sunrun Inc (RUN) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Sunrun Inc's (RUN, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Sunrun Inc (RUN, Financial) in one year is $14.38, suggesting a upside of 100% from the current price of $7.19. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Sunrun Inc (RUN) Summary page.
RUN Key Business Developments
Release Date: May 07, 2025
- Cash Generation: $56 million in Q1, marking the fourth consecutive quarter of positive cash generation.
- Unrestricted Cash: Ended Q1 with $605 million, a $30 million increase from the prior quarter.
- Customer Additions: Grew 6% compared to the prior year.
- Aggregate Subscriber Value: Increased 23% from last year to more than $1.2 billion.
- Storage Attachment Rate: Reached a record high of 69%, with customer additions with storage growing by over 46% from Q1 of last year.
- Subscriber Value: Approximately $52,000, a 15% increase compared to the prior year.
- Net Subscriber Value: Grew 66% year-over-year to $10,390.
- Aggregate Subscriber Value: $1.2 billion in Q1, a 23% increase from the prior year.
- Net Value Creation: $246 million or approximately $1.09 per share.
- Contracted Net Value Creation: $164 million, a 104% increase from last year, about $0.72 per share.
- Advance Rate: Approximately 87% of the aggregate contracted subscriber value.
- Realized Proceeds: Just over $1 billion, with $256 million from tax equity and $755 million from nonrecourse debt.
- Debt Repayment: Paid down $27 million of borrowings under the working capital facility.
- Guidance for 2025: Aggregate subscriber value expected between $5.7 billion and $6 billion, contracted net value creation between $650 million and $850 million.
- Cash Generation Guidance for 2025: $200 million to $500 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sunrun Inc (RUN, Financial) exceeded its volume and cash generation targets, generating $56 million in cash for the fourth consecutive quarter.
- The company achieved a 23% growth in aggregate subscriber value, reaching over $1.2 billion, supported by higher-valued storage offerings.
- Sunrun Inc (RUN) increased its market share to approximately 19% of new solar installations and about 45% of new storage installations across the country.
- The introduction of the new product, Sunrun Flex, is expected to generate significant additional customer payments and enhance customer flexibility.
- Sunrun Inc (RUN) has strong access to capital markets, with over $1.3 billion in tax equity added in 2025 and $819 million in unused commitments available in its nonrecourse senior revolving warehouse loan.
Negative Points
- The dynamic environment for tax policy and tariffs presents uncertainties that may require significant adjustments for Sunrun Inc (RUN).
- Tariff impacts are expected to create cost headwinds of approximately $1,000 to $3,000 per subscriber in 2025, affecting cash generation guidance.
- The potential removal of transferability from the IRA could temporarily shift Sunrun Inc (RUN)'s capital sourcing strategy.
- Sunrun Inc (RUN) faces challenges in maintaining cost discipline, with creation costs increasing due to higher battery hardware and associated installation labor costs.
- The company is exposed to risks from potential changes in federal policy and trade situations, which could impact its operations and financial performance.
