Sunrun Inc

Muddy Waters Research is shorting solar company Sunrun — but why is the investigative firm known for short selling targeting this company?

For 3Q16, Sunrun’s (RUN) consolidated revenue came in at ~$112 million against analysts’ expectations of $135 million.

SolarCity was founded in 2006 with the initial focused on selling, financing, and installing solar energy systems for residential and commercial customers.

Sunrun was co-founded in 2007 as a startup by Ed Fenster and Lynn Jurich, with an aim to create worldwide use of solar energy. It began offering solar services in 2008.

Among the downstream solar companies, SolarCity (SCTY) has the highest EV-to-sales value of 8.70x, which is closely followed by Vivint Solar at 8.31x.

During Tesla’s Q3 call, Musk said that he thinks Tesla’s solar segment could be as big or even bigger than the company’s electric vehicle business.

Top solar stock First Solar (FSLR) has surged about 10% in September. FSLR is trading close to its 52-week high and might continue to march upward.

Short-seller Citron Research noted that Generac Holdings could challenge solar microinverter makers Enphase Energy and SolarEdge’s duopoly.

Solar microinverter company Enphase Energy (ENPH) has rallied more than any other stock in the space this year with a more-than-600% gain.

First Solar stock is trading at a forward PE ratio of 18x. On average, solar stocks (TAN) are trading at a forward valuation multiple of 14x.

Vivint Solar (VSLR) reported a cost per watt of $2.94 for 3Q17, higher than the $2.88 it reported in 2Q17 and $3.85 in 3Q16.

Business expansion is crucial for companies like SolarCity, which intends to expand its presence via partnerships with homebuilders and industry leaders.

SolarCity’s business is divided into two segments: Operating Leases and Solar Energy Systems Incentives and Solar Energy Systems and Component Sales.

One out of four analysts covering Vivint Solar (VSLR) has rated the stock a “buy,” two analysts rated the stock a “hold,” and one analyst recommends a “sell” for the stock.

ITCs (investment tax credits) are a dollar-for-dollar reduction on an income tax bill. It is applicable to both residential and commercial deployment of solar systems.

Vivint Solar’s business model is divided into two revenue segments: Operating Leases and Incentives and Solar Energy Systems and Product Sales.

Unlike its peers, Sunrun is building an open platform of services and tools to provide a differentiated customer experience and, at the same time, gaining a wide customer base.

In February 2014, Sunrun (RUN) acquired the residential business of REC Solar, AEE Solar, and SnapNrack from Mainstream Energy Corporation for $78.8 million.

Extension of ITCs for investments in solar energy has been key for the rapid expansion of downstream solar companies like Sunrun, Vivint Solar (VSLR), SolarCity (SCTY), and SunPower (SPWR).

Vivint Solar’s estimated nominal contracted payments remaining increased by $251.4 million during 4Q15, compared to $214 million during 3Q15.