Mizuho raises Sunrun stock price target to $16, retains outperform

On Thursday, Mizuho (NYSE:MFG) Securities exhibited confidence in Sunrun Inc . (NASDAQ:RUN), as analyst Maheep Mandloi increased the firm’s price target on the stock to $16.00, up from the previous $15.00, while maintaining an Outperform rating. With a current market capitalization of $1.81 billion and a volatile beta of 2.66, Sunrun remains a closely watched player in the renewable energy sector. Mandloi’s update came in the wake of Sunrun’s first-quarter performance, which saw the company generate $56 million in cash and reaffirm its cash generation target of $200-$500 million for the year 2025. This is in spite of potential tariff impacts that could cost the company $100-$200 million. According to InvestingPro analysis, the company is currently operating with a significant debt burden, which warrants careful monitoring.

Sunrun’s management has indicated expectations for a mid-single digit percentage increase in new customer growth, despite the company’s revenue declining by 9.83% over the last twelve months. This projection is notably more optimistic than the estimated 7% year-over-year decrease for the U.S. residential solar market, suggesting that Sunrun is poised to capture significant market share gains. The introduction of Sunrun’s new Flex (NASDAQ:FLEX) product is anticipated to streamline solar sales within the residential sector. Flex allows customers to invest in larger solar systems to accommodate potential future energy needs, rather than limiting the system size to their current usage.

The Flex product also presents an opportunity for Sunrun to realize non-contracted revenues prior to system renewal, which could address some investor concerns regarding revenue generation. With a debt-to-equity ratio of 5.13 and a current ratio of 1.29, the company’s financial structure requires careful consideration. Furthermore, Sunrun has made efforts to simplify the calculation of key metrics, enhancing transparency and providing a more direct correlation between the company’s projected value creation and its cash generation capabilities.

Mandloi’s reaffirmation of the Outperform rating for Sunrun is grounded in the company’s status as a market share leader, its strong liquidity position, and its potential for sustained value creation, even in scenarios where the Inflation Reduction Act (IRA) might be repealed. The raised price target to $16 reflects Mizuho’s positive outlook on Sunrun’s strategic initiatives and financial health. Based on InvestingPro’s comprehensive analysis, which includes over 30 financial metrics and detailed financial health scores, Sunrun is currently trading slightly above its Fair Value. Discover more insights and access the full Pro Research Report, along with 12 additional ProTips for Sunrun, by subscribing to InvestingPro.

In other recent news, Sunrun Inc. reported better-than-expected financial results for the first quarter of 2025, with earnings per share (EPS) of -$0.20, surpassing the forecast of -$0.37. The company’s revenue also exceeded expectations, reaching $504.3 million compared to the projected $486.1 million. Sunrun’s cash generation for the quarter was $56 million, significantly higher than Barclays (LON:BARC)’ estimate of $12 million. Barclays maintained its Equalweight rating for Sunrun, with a price target of $15.00, noting the company’s ability to maintain its cash generation guidance despite tariff challenges. Sunrun’s financial metrics, including $1.2 billion in aggregate subscriber value and $164 million in contracted net value creation, were reported to be in line with expectations. The company has updated its approach to calculating these metrics, aligning them more closely with GAAP standards. Sunrun also launched its innovative solar product, the Flex offering, which aims to provide a flexible and affordable energy solution for customers. These developments reflect Sunrun’s strategic focus on innovation and cost discipline, allowing it to capture a larger market share in the residential solar and storage markets.

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