Sunrun’s Strong Cash Generation Outlook Merits a Buy Rating

Analyst Michael Blum from Wells Fargo maintained a Buy rating on Sunrun (RUN – Research Report) and decreased the price target to $18.00 from $22.00.

Michael Blum has given his Buy rating due to a combination of factors surrounding Sunrun’s financial outlook and cash generation abilities. Despite a miss on Q1 cash generation, largely attributable to one-time items, Sunrun has maintained its cash generation targets, which Blum perceives as a positive sign, particularly in the context of the company’s sound near-term liquidity. Furthermore, the company’s ability to exceed expectations in solar energy capacity and storage capacity during the first quarter underscores its operational capabilities, which bolsters confidence in its future performance.
Additionally, Blum’s analysis indicates that Sunrun’s strategic focus on cash generation is particularly important given the challenges faced by the residential solar market. The company’s projections suggest robust cash generation for the remainder of the year and into 2025, potentially leading to a cash balance that could equal 50% of the company’s current market capitalization. This substantial cash reserve could provide Sunrun with significant flexibility for future investments or debt reduction, presenting a compelling case for a Buy rating on the stock.

In another report released today, Citi also maintained a Buy rating on the stock with a $17.00 price target.

Based on the recent corporate insider activity of 112 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of RUN in relation to earlier this year.

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Sunrun (RUN) Company Description:

SunRun, Inc. engages in the design, development, installation, sale, ownership and maintenance of residential solar energy systems. It sells solar service offerings and install solar energy systems for homeowners through its direct-to-consumer channel. It also offers plans such as monthly lease, full amount lease, purchase system, and monthly loan. The company was founded by Edward H. Fenster, Robert N. Kreamer and Lynn M. Jurich in January 2007 and is headquartered in San Francisco, CA.