Sunrun’s Shadow

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Sunrun. The name tasted like static on the ticker today. Shares took a dive – 35% gone, just like that. A clean sweep of optimism, leaving behind a residue of questions.

They’d released their fourth-quarter numbers Thursday night, a preliminary glance at 2026. The revenue looked good, earnings weren’t bad, but beneath the gloss, things were fraying. It was like a dame in a silk dress with holes in the lining. Investors noticed. They always do.

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The Numbers and the Noise

Revenue was up, 123% they claimed. A big number. Earnings per share, a respectable 38 cents, a climb from the red ink of last year. A year-ago impairment charge had left a stain, but they’d mostly scrubbed it clean. On paper, it looked like a win. But the street doesn’t run on paper.

Dig a little deeper, and the picture blurred. Net subscriber value dropped 30%. Funding costs were climbing, tariffs were biting, and fewer folks were signing on. It was a slow leak in a good tire. You could patch it, maybe, but it’d never be quite the same.

Their outlook for 2026 wasn’t much better. Five billion in aggregate subscriber value, 850 million in net value creation, and 350 million in cash generation. Sounds impressive, until you realize those numbers are all heading south. Down from 5.6 billion, 1.0 billion, and 377 million just last year. It was a slow retreat, disguised as a strategy.

A Shift in the Wind

The ITC tax credit is fading, expiring at the end of 2025. Sunrun is pivoting, leaning into direct sales and subscriptions. Trying to hold onto what they can while the tax credits disappear. It’s like rearranging the deck chairs on a sinking ship. You can make it look tidier, but it doesn’t change the destination.

They’re shrinking in 2026, focusing on the businesses that still turn a profit. Demand is drying up, costs are rising. Not a pretty combination. But they’ve got scale, capacity. They can still generate cash, even at these lower levels. For now. Still, the producer price inflation report today didn’t help. It was a fresh gust of wind, blowing in more trouble.

Inflation is a double-edged sword for a company like Sunrun. They have to raise capital, pay for materials. But they also calculate the value of their subscriptions and PPAs. That measure is tied to discount rates, which are tied to interest rates. It’s a house of cards, really. A slight tremor, and everything could come tumbling down.

Sunrun might be worth a look after this tumble. But there’s too much uncertainty swirling around. Regulations, tariffs, interest rates. It’s a murky picture. I wouldn’t be rushing in just yet. The bottom might still be a long way down.

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2026-02-28 00:53