Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.8 |
| P/S | 9.7 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 8.0 |
| PEG | 3.7 |
| Analyst target | 7.5 |
- ▸Forward P/E: 15.0x
- ▸PEG: 3.07
RUN · Why this verdict
Why Sunrun (RUN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sunrun is a residential solar company with 43% year-over-year revenue growth and dramatic earnings beats in 3 of the last 4 quarters, but critical quality weaknesses including a Piotroski score of just 3 out of 9, free cash flow deeply negative at negative 395% of net income, and 30% short interest reflect genuine financial fragility beneath the growth surface.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue grew 43% year over year, and the company beat earnings estimates by more than 700% in the most recent quarter and more than 1,200% in the quarter before that, reflecting substantial outperformance relative to very low expectations. Growth breakdown | Revenue growth rate remains above 25% year over year over the next 12 months, and earnings per share beats consensus estimates in at least 3 of the next 4 quarters. | →Stable |
| CounterEnormous percentage beats against near-zero EPS estimates in solar are commonly driven by accounting treatment of installation capitalization rather than underlying demand strength; the massive surprise percentages obscure that the absolute earnings numbers are very small. | ||
Free cash flow is deeply negative at negative 395% of net income, meaning the company is consuming cash at a rate nearly four times its reported earnings, which requires continuous external financing to sustain operations and growth. Quality breakdown | Free cash flow deficit relative to net income narrows to less than negative 200% within 12 months, indicating improved capital efficiency in the installation business. | →Stable |
| CounterResidential solar companies have structurally negative free cash flow during growth phases due to upfront installation costs; the key question is whether the contracted cash flows from long-term customer agreements offset the upfront capital intensity. | ||
Short interest of 30% of float is the highest in this group and is explicitly flagged as justified by quality metrics, along with a put-to-call ratio of 2.45 and high implied volatility of 93%, indicating deep skepticism about the company's financial viability. Risk breakdown | Short interest falls below 20% within 12 months as the company demonstrates improvement in cash flow and reduces reliance on external financing. | →Stable |
| Counter30% short interest with a justified quality flag in a negative free cash flow company may accurately reflect structural insolvency risk if interest rates rise, reducing the value of long-term contracted solar revenue streams. | ||
Analysts maintain targets implying 54% upside from the current price of $12.47, while the stock sits in a technically weak position with a death cross pattern and price near 52-week lows, creating a large gap between what analysts expect and what the market currently prices. Sentiment breakdown | Price rises above $18, more than 44% above the current $12.47, within 12 months as execution on the growth narrative reduces the discount to analyst targets. | →Stable |
| CounterA death cross with price near 52-week lows in a capital-intensive growth company often precedes continued downside; the analyst upside may require multiple years to materialize rather than 12 months, assuming the company can finance itself through the interim period. | ||
Revenue grew 43% year over year, and the company beat earnings estimates by more than 700% in the most recent quarter and more than 1,200% in the quarter before that, reflecting substantial outperformance relative to very low expectations.
→StableGrowth breakdown
- Expectation
- Revenue growth rate remains above 25% year over year over the next 12 months, and earnings per share beats consensus estimates in at least 3 of the next 4 quarters.
CounterEnormous percentage beats against near-zero EPS estimates in solar are commonly driven by accounting treatment of installation capitalization rather than underlying demand strength; the massive surprise percentages obscure that the absolute earnings numbers are very small.
Free cash flow is deeply negative at negative 395% of net income, meaning the company is consuming cash at a rate nearly four times its reported earnings, which requires continuous external financing to sustain operations and growth.
→StableQuality breakdown
- Expectation
- Free cash flow deficit relative to net income narrows to less than negative 200% within 12 months, indicating improved capital efficiency in the installation business.
CounterResidential solar companies have structurally negative free cash flow during growth phases due to upfront installation costs; the key question is whether the contracted cash flows from long-term customer agreements offset the upfront capital intensity.
Short interest of 30% of float is the highest in this group and is explicitly flagged as justified by quality metrics, along with a put-to-call ratio of 2.45 and high implied volatility of 93%, indicating deep skepticism about the company's financial viability.
→StableRisk breakdown
- Expectation
- Short interest falls below 20% within 12 months as the company demonstrates improvement in cash flow and reduces reliance on external financing.
Counter30% short interest with a justified quality flag in a negative free cash flow company may accurately reflect structural insolvency risk if interest rates rise, reducing the value of long-term contracted solar revenue streams.
Analysts maintain targets implying 54% upside from the current price of $12.47, while the stock sits in a technically weak position with a death cross pattern and price near 52-week lows, creating a large gap between what analysts expect and what the market currently prices.
→StableSentiment breakdown
- Expectation
- Price rises above $18, more than 44% above the current $12.47, within 12 months as execution on the growth narrative reduces the discount to analyst targets.
CounterA death cross with price near 52-week lows in a capital-intensive growth company often precedes continued downside; the analyst upside may require multiple years to materialize rather than 12 months, assuming the company can finance itself through the interim period.
Per-dimension breakdown
Quality
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 2.4 |
| Op margin | 0.0 |
| Net margin | 8.9 |
| Current ratio | 5.3 |
| FCF quality | 0.0 |
| Moat | 4.2 |
| Piotroski F | 3.3 |
- ▸Strong margins: 18%
- ▸Earnings quality RED FLAG: -395% FCF/NI
- ▸No competitive moat
- ▸Weak Piotroski F-Score: 3/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 43% YoY
Momentum
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 6.7 |
| OBV | 10.0 |
| MA position | 7.2 |
| Volume | 10.0 |
| vol acceleration | 10.0 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+0.6%/30d) — pullback in uptrend, not confirmed weakness
- ▸Volume surge (5.0x avg) on up move
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 7.5 |
| Price target | 8.8 |
- ▸Analyst upside: 32%
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $9,455,568 (0.309% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.3 |
| quality rank | 4.4 |
| growth rank | 7.8 |
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.0 |
| support resistance | 4.7 |
| 52w position | 2.9 |
| gap | 3.0 |
- ▸Extreme gap up (20.9%) - may pull back
Risk (lower is worse)
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.5 |
| days to cover | 3.5 |
| volatility | 0.0 |
| put call | 7.5 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 2.3 |
| debt equity | 2.0 |
- ▸High short interest justified: 30%
- ▸High IV: 97%
- ▸Above max pain $6
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:8.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:42d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.3<1.5@spot
Warning (0)
none
Reward-to-Risk
1.28
Upside
+19.2%
Downside
15.0%
Sizing output
AVOID
SetupRECOVERY — Death cross but MACD improving, RSI 47
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 2.30>1.3, MCap $3.1B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:1.3<1.5@spot.
The strongest dimensions are Growth at 10.0, Momentum at 8.1, and Sentiment at 7.4; the weakest are Risk (lower is worse) at 2.4, Quality at 2.7, and Insider at 3.4. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 1.28 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue grew 43% year over year, and the company beat earnings estimates by more than 700% in the most recent quarter and more than 1,200% in the quarter before that, reflecting substantial outperformance relative to very low expectations.
Trip ifRevenue growth rate falls below 15% year over year for at least 2 consecutive quarters, indicating a more than 60% deceleration from the current 43% pace.
- P2Free cash flow is deeply negative at negative 395% of net income, meaning the company is consuming cash at a rate nearly four times its reported earnings, which requires continuous external financing to sustain operations and growth.
Trip ifFree cash flow deficit as a percentage of net income worsens beyond negative 500%, indicating accelerating cash consumption relative to earnings.
- P3Short interest of 30% of float is the highest in this group and is explicitly flagged as justified by quality metrics, along with a put-to-call ratio of 2.45 and high implied volatility of 93%, indicating deep skepticism about the company's financial viability.
Trip ifShort interest rises above 35% of float, more than 5 percentage points above the current 30%, indicating increased conviction in the bear case.
- P4Analysts maintain targets implying 54% upside from the current price of $12.47, while the stock sits in a technically weak position with a death cross pattern and price near 52-week lows, creating a large gap between what analysts expect and what the market currently prices.
Trip ifPrice falls below $9, more than 28% below the current $12.47, setting a new 52-week low and indicating the analyst upside thesis is losing market credibility.