Why Sunrun (RUN) Dipped More Than Broader Market Today

Sunrun (RUN) shares underperformed the market, falling 1.81% against the S&P 500's 0.27% decline, and are down 25.55% over the past month. The company's upcoming earnings are expected to show an EPS of -$0.2, a 136.36% decrease year-over-year, though revenue is projected to increase by 5.81% to $554.31 million; full-year estimates forecast an EPS of -$0.32 and revenue of $2.25 billion, representing -124.06% and +10.28% changes, respectively. Despite a recent 30.01% increase in the Zacks Consensus EPS estimate, Sunrun holds a Zacks Rank of #3 (Hold), and the Solar industry is in the bottom 28% of Zacks-ranked industries.

Analysis

Sunrun (RUN) shares experienced a daily decline of 1.81% to $8.70, underperforming the S&P 500's 0.27% loss, and have significantly lagged over the past month with a 25.55% drop, contrasting with the Oils-Energy sector's 4.61% gain and the S&P 500's 6.9% rise. Investor attention is focused on the upcoming earnings release, where Sunrun is anticipated to report an EPS of -$0.20, a substantial 136.36% decrease compared to the prior year's quarter. Conversely, revenue is projected to grow by 5.81% year-over-year to $554.31 million. For the full fiscal year, consensus estimates point to an EPS of -$0.32, representing a 124.06% decline, while revenue is expected to increase by 10.28% to $2.25 billion. Despite the negative earnings outlook, the Zacks Consensus EPS estimate has seen a positive revision, increasing by 30.01% over the past month. Sunrun currently holds a Zacks Rank of #3 (Hold). The broader Solar industry, within the Oils-Energy sector, is ranked in the bottom 28% of over 250 industries with a Zacks Industry Rank of 178, suggesting general weakness in the sector.

Key Decisions for Investors

• Investors should closely monitor Sunrun's upcoming earnings release for actual EPS and revenue figures against the sharply contrasting expectations of declining profitability alongside revenue growth, and scrutinize management's outlook.
• The significant recent underperformance of RUN's stock, coupled with a projected 136.36% YoY fall in quarterly EPS, warrants caution, even though consensus EPS estimates have recently been revised upwards by 30.01%.
• Given Sunrun's 'Hold' rating and the Solar industry's current weak ranking (bottom 28%), investors may consider awaiting more definitive signals of improving profitability and market sentiment before adjusting positions.