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Sunrun Inc (NASDAQ: RUN) is up more than 15% on Wednesday after rival SunPower Corporation (NASDAQ: SPWR) filed for bankruptcy following months of struggles related to higher interest rates.
SPWR recently faced allegations of financial misconduct which contributed to GLJ Research calling SunPower stock “worthless” in July.
But the bane of SunPower could be a boon for Sunrun which is already in talks to bring some of its former dealers on as partners.
On the earnings call this morning, Sunrun chief executive Mary Powell dubbed SPWR bankruptcy an opportunity for Sunrun to “gain share in a financially disciplined and measured way”.
Sunrun stock has recovered almost its entire loss since the start of 2024.
Sunrun brings SPWR executives onboard
Sunrun also hired Ellen Struck and Matt Brost – two former executives of SunPower Corporation on Wednesday. Struck and Brost will head the new homes business at the residential solar solutions company.
“We expect strategic growth in the new homes segment in the coming quarters,” CEO Powell told analysts on the call today.
Additionally, RUN reported a surprise profit for its second financial quarter on Wednesday.
Its revenue also topped Street estimates to deliver confidence that cash generation will fall between $350 million and $600 million in 2025.
Sunrun installed 265 Megawatt hours of storage capacity in the second quarter – up a whopping 152% on a year-over-year basis. You can read the Nasdaq-listed firm’s full earnings release on this link.
Goldman Sachs raises price target on Sunrun stock
Sunrun generated $217 million in cash in the recently concluded quarter. It will remain focused on margins but is committed to launching new products and services to “expand customer lifetime values” in the coming months, as per the company’s press release on Wednesday.
That and the upbeat remarks on the earnings call were sufficient for Goldman Sachs analyst Brian Lee to raise his price target on RUN to $20, which signals the potential for another 5.0% gain from here.
The investment firm expects strong cash flow and SunPower bankruptcy to deliver continued market share gains to Sunrun moving forward.
Lee’s optimism is broadly shared by other Wall Street analysts. The average price target on Sunrun stock currently sits at an even higher $22 which translates to about a 16% upside from here. Still, RUN is not an attractive stock for income investors as it doesn’t currently pay a dividend.
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