Why Sunrun Crashed Today
Why Sunrun Crashed Today
Billy Duberstein, The Motley FoolFri, February 27, 2026 at 10:05 PM UTC
0
Key Points -
Sunrun posted declines in key performance metrics and subscribers.
It also forecast negative growth in the year ahead.
Regulatory changes and inflation and forcing the company to focus on its higher-margin businesses and scale back lower-margin partner sales.
10 stocks we like better than Sunrun ›
Shares of solar system installer Sunrun (NASDAQ: RUN) plunged 35.1% on Friday.
Sunrun published its fourth-quarter earnings report and gave preliminary guidance for 2026 on Thursday night. And while the fourth-quarter revenue and earnings results came in strong, other key financial metrics fell. Meanwhile, forward guidance, affected by regulatory changes and product inflation, clearly distressed investors.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Sunrun's revenue and earnings beat, but other KPIs go south
In the fourth quarter, Sunrun grew revenue 123% to 1.16 billion, beating expectations, with earnings per share of $0.38 up from a massive net loss a year ago, due to an impairment charge in the year-ago quarter. Both figures beat expectations.
However, other key performance indicators (KPIs) weren't as good. The company's net subscriber value decreased by 30%, as higher funding costs ran into inflationary pressures from tariffs and other cost increases, along with lower total subscriber additions.
Furthermore, management guided to negative growth in the year ahead. At the midpoints of its 2026 outlook ranges, Sunrun management projects $5.0 billion in aggregate subscriber value, $850 million in net value creation, and $350 million in cash generation. Those would all mark stark declines from the $5.6 billion, $1.0 billion, and $377 million generated in 2025, respectively.
Workers laying down solar panels on a roof.
Image source: Getty Images.
Sunrun is forced to pivot
With the ITC tax credit for homeowners phasing out for buyers of solar systems at the end of 2025, Sunrun is leaning more into its direct sales and subscriptions for 2026, as those sales maintain the existing commercial tax credits. That is forcing Sunrun to pivot and shrink in 2026 in order to focus on its highest-margin businesses as demand dries up while costs rise.
That's not a pretty combination, even if Sunrun does have the scale and capacity to maintain positive cash generation even at these lower levels of activity. Furthermore, today's hotter-than-expected producer price inflation report won't do anything to relieve inflation anxiety.
Advertisement
Higher inflation doubly harms a business like Sunrun, which not only has to raise capital and pay for commodities, but also calculates the aggregate value of its subscriptions and PPAs as a KPI. That measure is greatly affected by discount rates, which are related to interest rates.
All in all, Sunrun may be worth a look after this plunge, but there is too much uncertainty around regulations, tariffs, and interest rates to be confident we are at a bottom.
Should you buy stock in Sunrun right now?
Before you buy stock in Sunrun, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sunrun wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $456,188!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,133,413!*
Now, it’s worth noting Stock Advisor’s total average return is 916% — a market-crushing outperformance compared to 194% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of February 27, 2026.
Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Source: “AOL Money”
