Sunrun Dogged By ‘Regulatory Flux’ But Tops SolarCity, Eyes Growth
Sunrun ( RUN ) is outperforming top rival SolarCity ( SCTY ) but will have to ramp up in the second half of 2016 to defeat regulatory flux in California, New Hampshire, Massachusetts and Hawaii that threatens its 40% growth view, Credit Suisse said Friday. Sunrun stock rocketed 8% in early afternoon trading on the stock market today , helping to pull SolarCity stock up more than 1% in the process, after Sunrun late Thursday crushed Q1 expectations . It reported $98.7 million in sales, up 99% from the year-earlier quarter, and 13 cents earnings per share. Wall Street consensus modeled $87.7 million and a 48-cent per-share loss. The No. 2 residential installer beat rivals SolarCity and Vivint Solar ( VSLR ) to profitability. On Monday, SolarCity and Vivint Solar separately reported year-over-year sales growth, but also posted per-share losses that widened. All three are dogged by the same regulatory environment, but Sunrun is faring the best, Credit Suisse analyst Patrick Jobin said Friday in a research report. Jobin retained his outperform rating and 18 price target on Sunrun stock, which was trading near 6.50 Friday afternoon. During Q1, Sunrun deployed 60 megawatts, up 63% year over year, vs. 40% and 19% growth for SolarCity and Vivint Solar, respectively. SolarCity’s Q1 bookings fell 33% vs. the year-earlier quarter to 160 MW. Sunrun’s Q1 bookings rose 46%, also topping Vivint Solar’s 33% growth. To achieve its 40% growth target for 2016, Sunrun will need to pick up the pace in the second half of the year, Jobin wrote. For the year, Sunrun expects 285 MW in deployments, including 60 MW in current-quarter guidance. Jobin, though, expects 271 MW in deployments, up 34%. “Management is clear that the guidance is attainable, but not necessarily easily attainable,” he wrote.