Sunrun (RUN) Stock Forecast & Price Target

Sunrun's subscriber value has shown a significant increase, rising to $55.8k sequentially from $51.2k in 3Q24, driven by improved battery attachment rates and a higher Investment Tax Credit (ITC) level of 39.8%. The company's management anticipates that subscriber value will continue to exceed customer creation costs in 2025, leading to incremental value generation projected to grow by 5-15% year-over-year. Additionally, Sunrun's balance sheet supports its operations, with positive momentum in customer value creation evidenced by a 9% quarter-over-quarter increase in contracted subscriber value and a notable increase in subscriber value per watt from $7.04 to $7.39.

Sunrun's financial outlook has been downgraded, with 2025 revenue estimates reduced to $2.30 billion from a prior estimate of $2.32 billion due to slower anticipated solar growth and other prevailing market conditions. Additionally, the company's cash generation target for FY 2025 was substantially lowered by 26% to a midpoint of $350 million, reflecting challenges such as a reduced ITC rate from domestic content compliance issues and higher capital costs. Furthermore, growth forecasts have been adjusted to a flat customer addition rate compared to the previously expected 10-15% growth, exacerbating concerns surrounding the company's long-term financial performance.