What Happened?
Shares of residential solar energy company Sunrun (NASDAQ: RUN) fell 36.1% in the afternoon session after it reported its fourth-quarter earnings, as a weak outlook and concerning financial metrics overshadowed strong headline results. The company beat Wall Street estimates, reporting impressive revenue of $1.16 billion, up 124% year-over-year, and a surprise profit with earnings per share of $0.38. However, investors focused on the company's future prospects and financial health. Analysts' forecasts pointed to a 13% revenue decline over the next 12 months and a return to negative earnings per share. Furthermore, Sunrun's cash burn worsened, with negative free cash flow increasing to $312.7 million for the quarter. This, coupled with the company's significant debt load, fueled concerns about its long-term profitability and financial stability.
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What Is The Market Telling Us
Sunrun’s shares are extremely volatile and have had 82 moves greater than 5% over the last year. But moves this big are rare even for Sunrun and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 23 days ago when the stock gained 11.3% on the news that the company announced it built the nation's largest distributed power plant as customer participation in its programs grew more than fivefold in 2025. This growth transformed the business into one of the country's largest sources of flexible energy. The company dispatched nearly 18 gigawatt-hours of energy from customer batteries to support grids, which was enough electricity to power 15 million homes for one hour. The combined peak output reached 416 megawatts, a capacity greater than many fossil-fuel power plants. Sunrun reported that customer enrollment in its 17 distributed power plant programs jumped to more than 106,000 in 2025, a dramatic increase from approximately 20,000 the year prior. CEO Mary Powell stated that Sunrun's power plants hit scale when grid operators needed help meeting energy demand, delivering energy reliably and at a lower cost.
Sunrun is down 33.3% since the beginning of the year, and at $12.98 per share, it is trading 39.4% below its 52-week high of $21.41 from January 2026. Investors who bought $1,000 worth of Sunrun’s shares 5 years ago would now be looking at an investment worth $193.19.
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