Is it Time to Buy the Dip on Sunrun Stock?

RUN stock has halved since its January all-time high

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Sunrun Inc (NASDAQ:RUN) is an American residential solar, storage, and energy services company. Sunrun has provided residential solar panels and home batteries to more than 550,000 customers and has sold its solar service in 22 states, plus Washington D.C., and Puerto Rico. Sunrun stock has a market cap of nearly $11 billion.

Sunrun stock is up roughly 85% year-over-year, though it sports a 24.5% deficit for 2021, and has almost halved since hitting a record high of $100.93 on Jan. 12. The stock could find its footing at the 320-day moving average, which contained most of today's pullback. 

RUN has done poorly in the earnings confessional over the past year, beating earnings expectations on only one of its last four reports. For the second quarter of 2020, Sunrun missed analyst estimates by a margin of $0.27 and reported an earnings per share (EPS) of -$0.11. For the third quarter of 2020, RUN's earnings increased to $0.28 per share and beat expectations by a margin of $0.26. For the fourth quarter of 2020, Sunrun posted a huge decrease in earnings, dropping to -$0.75 per share and missing estimates by a margin of $0.87. For Q1 of 2021, Sunrun reported an EPS of -$0.12 and missed expectations by a margin of $0.01. The company is expected to release its latest quarterly results next month on Monday, August 9. 

The strongest selling point for Sunrun stock lies in its revenue growth. RUN has nearly doubled its revenues since fiscal 2017 and its trailing 12-month revenues are currently up by 13% compared to what was reported for fiscal 2020. However, fundamentally, Sunrun stock is still a high-risk investment given the company’s lack of profitability and high valuation. On top of that, RUN's balance holds $5.18 billion in debt and just $650 million in cash. Overall, it is difficult not to imagine Sunrun stock falling further down in price, at least in the short-term.

 

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