Sunrun Inc. (RUN) provides homeowners with clean, affordable solar energy and storage. It engages in the design, development, installation, sale, ownership, and maintenance of residential solar energy systems in the United States. It also sells solar leads.
The company just posted its latest earnings results for the third quarter where it reported revenue of $439 million, which was a 109% year over year increase. However, net income fell from a loss of $85 million in the third quarter of 2020 to a loss of $241 million in the most recent quarter.
As of the end of the third quarter, RUN has a current ratio of 1.88 indicating it has more than enough liquidity to handle short-term obligations. For the current quarter, analysts expect sales to rise 29.2% year over year, while earnings are expected to surge 98.7% year over year.
But the stock looks overvalued with a trailing P/E of 894 and a forward P/E of 294.12. RUN started the year with bearish momentum, but performance has turned positive since early October. This is evident in the chart below.
Take a look at the 1-year chart of RUN below with my added notations:
Chart of RUN provided by TradingView
During the past few months, RUN has formed a key level of resistance at the $60 (red) mark. The stock has tested that area a couple of times since the end of May and is currently sitting right under that level again.
A solid close above $60 should lead to higher prices for RUN. A long trade could be entered on a breakthrough of that level with a protective stop place underneath your entry point.
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RUN shares fell $0.80 (-1.39%) in premarket trading Friday. Year-to-date, RUN has declined -18.20%, versus a 26.63% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing. More...
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