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Investing.com - Guggenheim upgraded Sunrun (NASDAQ:RUN) from Neutral to Buy with a price target of $27.00 on Monday, citing the company’s effective business management in a challenging industry. The new target represents a 58% upside from the current price of $17.13, significantly above the average analyst target of $22 per share.
The upgrade follows Sunrun’s third-quarter 2025 results released last Thursday, which Guggenheim believes demonstrate the company’s ability to consistently generate cash and improve opportunities for capital returns to shareholders. InvestingPro data shows analysts expect Sunrun to be profitable this year, with a forecasted EPS of $1.43 for fiscal 2025, despite not being profitable over the last twelve months.
Sunrun stock declined 16% on Friday, compared to a 0.13% increase for the S&P 500, which Guggenheim characterized as an "excessive" market reaction to the company’s modest solar capacity additions.
The $27 price target represents a shift in Guggenheim’s valuation approach, now based on a two-stage discount model applied to Sunrun’s expected cash generation rather than expected growth in net earning assets. This approach comes despite Sunrun’s concerning free cash flow yield of -92% and significant debt burden, with a debt-to-equity ratio of 4.92.
Guggenheim views Friday’s stock decline as providing "an attractive entry point" for investors interested in the solar company. Despite the recent drop, Sunrun has delivered impressive returns of 82.62% over the past six months and 67.45% over the past year. For deeper insights into Sunrun’s financial health (currently rated as WEAK), valuation metrics, and 17 additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Sunrun Inc . announced its third-quarter 2025 financial results, which showed mixed outcomes. The company reported earnings per share (EPS) of $0.06, which fell short of the anticipated $0.13, marking a 53.85% miss. On the positive side, Sunrun’s revenue for the quarter was $724.56 million, significantly exceeding expectations by 20.64%. This revenue beat indicates strong performance in sales, despite the EPS shortfall. While the earnings figures were below projections, the revenue results demonstrate a robust growth trajectory for the company. These developments are part of Sunrun’s ongoing financial narrative. Analysts and investors will be watching closely to see how the company navigates these mixed results moving forward.
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