Sunrun could see its stock price double over the next 12 months as the company is well positioned to take advantage of growth in the residential solar market after a disappointing 2023, according to Jeffries. Analyst Dushyant Ailani has a buy on the stock and raised his price target by $6 to $31 a share, twice its Wednesday’s close of $15.58. Sunrun’s stock was down nearly 9% in morning trading on Thursday after the company posted a steeper fourth-quarter loss than Wall Street expected and missed revenue estimates. But Ailani is taking the long view, noting that Sunrun is the leading clean energy provider with a 60% residential market share for new subscriptions. Sunrun’s transition from a solar only company to one that also provides battery storage should act as a catalyst that will increase the net value of its subscribers, the analyst told clients in a research note Thursday. Sunrun also stands to benefit from falling costs and Inflation Reduction Act tax credits, he said. The company’s net subscriber value of $13,445 in the fourth quarter came in 12% above consensus estimates, Ailani wrote. Sunrun has made progress on its shift to storage, with attachment rates improving to about 45% in the fourth quarter compared with 15% in the first quarter of 2023, he said. Ailani’s new price target is based on Sunrun’s future subscriber growth plus the present value of its existing customers. Jeffries is estimating that Sunrun will add about 121,000 new subscribers in 2024, which is 7% above consensus estimates. All told, the new subscribers will add $1 billion in value, according to the firm. — CNBC’s Michael Bloom contributed to this report.
