What’s Next for Sunrun in the Wake of Its Q3 Results?

Sunrun (RUN) stock has lost almost 4% this week. Solar stocks have mostly been weak recently. Despite its recent weakness, Sunrun is sitting at a solid gain of about 30% year-to-date.

Sunrun: Latest institutional holdings

Hedge fund Tiger Global Management has been increasing its stake in Sunrun for the last few quarters. At the end of the third quarter, the fund held more than 25% or 29.77 million of RUN’s total outstanding shares, as per its latest 13F filings. It added net 1.06 million shares of Sunrun during the quarter.

Fidelity Management was the company’s second-biggest institutional investor, holding a stake of approximately 9% as of September 30. Sunrun is a San Francisco–based residential solar company with a market cap of $1.66 billion.

Among other notable additions, the Vanguard Group added net 1.08 million shares, while BlackRock Institutional Trust added net 0.52 million shares of Sunrun in the third quarter.

Third-quarter earnings

Sunrun stock largely trended lower in the third quarter. It saw weakness in early August after its second-quarter earnings release. However, it beat third-quarter earnings estimates last week. It reported a net income of $23 million on total revenue of $226 million in the third quarter. It reported 271,000 customers during the quarter, up 24% year-over-year.

The stock closed at $14.09 on November 19, almost 12% and 14% lower than its 50-day and 200-day simple moving average levels, respectively. A notable discount to both the key levels highlights a weakness in the stock. Its 50-day level of close to $16 might act as a resistance for it in the near future.

Sunrun stock breached this level in August and October and has been weak since then. It crossed above this level a couple of times last month but failed to keep the momentum. Sunrun’s RSI (relative strength index) was close to 35 on November 19, indicating that the stock might be approaching the oversold zone.

Sunrun stock has fallen almost 35% since its 52-week high of $21.4 in July 2019. It’s rallied more than 60% since its 52-week low of $8.8 in December last year.

Analysts’ price targets

Wall Street analysts mainly seem positive about Sunrun stock. They’ve given it a mean target price of $20.4 against its current market price of $14.09, indicating a potential upside of almost 45% over the next 12 months. Of the ten analysts tracking RUN, six recommend “buys,” two recommend “holds,” and another two recommend “strong buys.” No analysts recommend “sells” as of November 20. Credit Suisse cut its target price to $24 from $26 last week. UBS also cut its target from $17.5 to $17 last week.

Yesterday, Sunrun announced a supply agreement with solar microinverter maker Enphase Energy (ENPH). The company will use Enphase’s IQ microinverters in its residential solar business. Read more in Where Enphase Energy Stock Might Be Heading.