It surprised on the upside with its first-quarter performance.
To put it mildly, solar energy stocks have not been popular lately. You'd hardly know it from Sunrun's (NASDAQ: RUN) performance on the market Thursday; its shares gained nearly 8% on the back of an earnings report that sparked something of a bullish investor stampede.
Just after market close on Wednesday, Sunrun fired up its first-quarter results. Revenue was just over $722 million, for a meaty 43% increase year over year. Much of this growth came from a 151% leap in the company's crucial energy systems and products sales; these amounted to $254 million.
Image source: Getty Images.
On average, analysts tracking the consumer solar solutions company were modeling under $658 million for the total.
As for profitability, Sunrun's net income attributable to common shareholders more than tripled. It zoomed to $167.7 million ($0.62 per share) from the year-ago result of slightly over $50 million. Those pundits were collectively estimating $0.61 per share.
In the company's earnings release, it quoted CEO Mary Powell as saying, "Many companies are struggling to navigate the changes reshaping our industry; these market dislocations occurring around us present opportunities that play directly into Sunrun's strengths."
She added that "we believe that our subscription model, vertical integration, balance sheet, and scale are competitive advantages."
Sunrun provided selected guidance for the entirety of 2026. It believes it will be able to generate cash of $250 million to $450 million. It did not supply either revenue or profitability forecasts.
Despite the company's obvious improvements — particularly in its storage business — and the Thursday price pop, I feel the better companies in the solar sector remain undervalued. At some point, renewable energy will enjoy greater top-down support in the U.S., making titles such as Sunrun look like quality, inexpensive buys just now.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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