Following its 3Q16 results, Sunrun (RUN) revised its fiscal 2016 mW (megawatts) deployed guidance upward. The company now expects to deploy ~285 mW compared to its prior guidance of 270 mW to 280 mW. For 4Q16, the company expects its megawatts deployed to remain nearly unchanged at 80 mW on a quarter-over-quarter basis.
As we discussed earlier in this series, RUN has its net present value guidance of $1 per watt in 2H16. The company expects its cost per watt deployed to decrease, starting in 1Q17. However, the cost per watt of its direct install business is expected to remain flat in the coming quarter.
For the coming quarter, analysts expect Sunrun’s revenue to be ~$130 million, and they expect significant improvement in company revenue in the latter half of 1H17. This is in line with the expected increase in the company’s newly launched BrightBox plus PV (photovoltaic) product installations.
Sunrun’s (RUN) 3Q16 was driven by strong operational performance. The company outperformed its peers in crucial mW deployed growth rate metric on a quarter-over-quarter basis.
Moreover, Sunrun witnessed higher-than-anticipated bookings for its BrightBox plus PV products in 3Q16. The success of its BrightBox product could increase its megawatt booking volumes in the areas where economic benefits of net energy metering are minimal.
Moving ahead, a reduction in equipment costs could improve the company’s gross margins in the short term. In the long term, utility electricity rates and state-level regulations will decide the bottom lines of downstream solar (TAN) companies like SolarCity (SCTY), Vivint Solar (VSLR), Sunrun (RUN), and SunPower (SPWR).