Sunrun Inc. (NASDAQ:RUN) Should be Part of a Diversified Investment

Stock analysts at JP Morgan, assumed coverage of shares of Sunrun Inc. (NASDAQ:RUN) with Overweight recommendation, according to their opinion released on January 16. Analysts at Goldman issued an upgrade for the stock to Buy from previous rating of Neutral, in a research note that dated back to June 18.

For the period that ended January 15, 2020, the short interest in Sunrun Inc. (NASDAQ:RUN) stock is on the up. The 6.2% rise could be an indication that investors and traders expect a drop in the share price, often as a result of a drop in the business’ fundamentals. The average brokerage opinion at 2 suggests acquiring these shares. Between December 31 and January 15, the total count of shorted shares totaled 16.76 million. That number was 978,553 more shares compared with the total of 15.78 million shares in the space of prior two weeks, which suggests more traders or funds are betting that the company stock will move down. The average daily volume for RUN at the January 15th settlement retreated to 1,229,752, versus 1,426,565 at the December 31st report. That led days to cover to move at 13.627333, a 23.2% increase compared to the 11.061317 days to cover recorded at the prior short interest data release.

Let’s take a glimpse at some insider activity at Sunrun Inc. (NASDAQ:RUN) and observe the pattern. The earliest insider trade happened on 01/30/2020. Fenster Edward Harris parted with a total of 3.62 thousand shares of the firm at average share price of $17.93. The total amount for the sale was set at $64.96 thousand. On completing this exchange, the Chairman account balance was 1.9 million shares. The stock grew 5.02 percent from that insider sale. On 01/21/2020, Komin Robert Patrick Jr., CFO, did a sale of 17.56 thousand shares at a price of $17.29 per share. This got rid of 303.63 thousand shares from the insider’s fortune and the stock experienced a 8.91 percent rally in price since the news became public. This exchange saw 361.11 thousand shares get out from the CFO account. On 01/16/2020, CFO Komin Robert Patrick Jr. recorded a sale transaction valued at $614.97 thousand. The sale at $15.97 a share has eliminated 38.51 thousand shares from the insider’s portfolio position. Meanwhile, shares price witnessed 17.91 percent increase since the transaction reporting date. The company insider is left with 365.53 thousand shares remaining in the account. Fenster Edward Harris, who works as Chairman at the company, performed a sale of 50 thousand shares in a transaction worth $796 thousand. The disposal recorded on 01/16/2020 was priced at $15.92 per share. The stock price soared 18.28 percent since the transaction. Fenster Edward Harris currently holds a stake of 1.89 million in RUN stock which is worth $35.58 million after the insider selling.

Sunrun Inc. (RUN) is most likely going to rise 8.22 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $25 as 12-month high price target. This represents a whopping 32.63 percent increase from the current trading price of shares. The 52-week median price target given by the analysts is $19.5, which means a return possibility of 3.45 percent in comparison with the closing price of the stock of $18.85 in recent trading session. The lowest price set for the stock is $17 which is just above -9.81 percent from RUN share’s price at the end of session.

The stock is lingering around the initial support level of $17.85. After this, the following support is at the zone of $17.44. Up until the time the RUN stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 75.79 on the daily chart, and this may be a cause for concern. In case the price goes below $17.44 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $18.49 level may cause a pull-back move approaching $18.72 mark.

In the recent trading session, Sunrun Inc. (NASDAQ:RUN) shares gained 3.29% or 0.6 points to reach at $18.85 with a thin trading volume of 1.45 million shares. It opened the trading session at $17.86, the shares rose to $18.32 and dropped to $17.68, the range by which the price of stock traded the whole session. The company now has a market cap of $2.21 billion and currently has 121.17 million outstanding shares. Sunrun Inc. (RUN) stock has accumulated 27 percent of market value in 21 trading days.

RUN stock’s trailing 3-year beta is 0.7, meaning there will be a lower rate of return, although posing a lower risk. The part of a firm’s profit given to each outstanding share of regular stock was $0.05 share in the trailing 52 weeks. The stock’s value surged 32.15 percent year to date (YTD) compared to a rise of 33.6 percent in 52 week’s period. The firm’s shares are still trading -12 percent below its 1-year high of $21.42 and 46.12 percent up from 52-week low of $12.90. The average consensus ranking on the company is 2, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a buy.

Sunrun Inc. (RUN) shares are trading at a P/E ratio of 286.41 times earnings posted in the trailing 12 months. The industry RUN deals with has an average P/E of 47.58. Its P/B ratio is standing at 2X compared to the 16.26 industry average. It is additionally sporting a 2.3 on the Price-to-Sales ratio, compared to the industry’s P/S average of 0.05. Sunrun Inc. has a 27.7% gross profit margin, with its operating margin around -20.4%. Alongside this, the company’s net profit margin currently stands at 0.9%.

Past records have indicated that shares in Sunrun Inc. declined on 11 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of RUN’s Q4 earnings on February 27. Analysts are predicting revenue to suffer decline of -4.8 percent to $229M in the financial fourth quarter, while EPS will soar by about -540 percent to $0.22 per share. In the last quarter, it’s earnings of -$0.12 per share came worse than the $0.04352, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $240.12M, topping the $199.51M analysts had expected. Earnings are seen to rise by -84.4 percent this year, 123.05 percent in the coming year and the trend continues by 25.73 percent every year in the next 5 years.