Freedom cuts Sunrun target price to $10 after revising 2026 guidance

Freedom analyst Dmitry Pozdnyakov maintained a “Hold” rating on shares of Sunrun (RUN), one of the largest players in the U.S. residential solar market, but lowered the target price from $13 to $10. The new target is only 1.6% above the share price at the time of the report — $9.84. Over the past 52 weeks, the stock has traded in a wide range from $8.61 to $22.44.

Sunrun revenue rose 54% and beat analysts’ forecasts

In the second quarter of 2026, Sunrun’s revenue increased 53.8% year over year to $870 million, significantly above the consensus forecast of $746.9 million. The main driver was the company’s shift to direct equipment sales to customers instead of using financing structures through partners.

Sunrun (RUN) is a U.S. solar energy company that installs and services **residential solar panels and battery energy storage systems**. The company designs equipment for a specific home, installs it, and then provides monitoring and maintenance. Customers can either buy the system or use solar power via a subscription without large upfront costs. In addition, Sunrun aggregates home batteries into virtual power plants that can feed stored energy back into the grid during periods of high demand. 

Revenue from long-term customer agreements increased 18.7% to $543.7 million, while sales of solar energy systems and equipment nearly tripled — up 193% to $326.2 million. Sunrun expects to continue expanding direct sales in the second half of the year: their share should exceed 85% of total sales volume. Since the beginning of the year, the company has hired about 1.5 thousand employees for this effort.

The company also ended the quarter with net income again. It totaled $115.2 million, or $0.42 per share, versus market expectations of $0.23 per share.

Sunrun cut its 2026 guidance due to high rates and rising costs

Despite strong revenue, management lowered its full-year 2026 outlook. Expected total customer base value was reduced from $4.8–5.2 billion to $4.6–4.9 billion. The cash generation forecast was also cut: instead of the previous $250–450 million, the company now expects to generate $200–375 million.

The revision is tied to several factors at once. The business is being pressured by higher interest rates in recent months, lower sales through the partner network, including after the bankruptcy of former partner Freedom Forever, as well as additional costs associated with the transition to the new direct-sales model. Sunrun intends to direct the cash it generates primarily toward reducing its debt burden.

Another weak signal was customer base dynamics. During the quarter, Sunrun added 19 793 new customers — 12% more than in the first quarter, but 31% fewer than a year earlier. The value per new customer declined to $9 444 from $11 892 the prior quarter and was 44% below the year-ago level.

Freedom raised its Sunrun revenue forecast but sees no significant upside in the stock

After the results, the Freedom analyst raised Sunrun’s 2026 revenue forecast from $3.15 billion to $3.30 billion. For 2027, the estimate was increased from $3.49 billion to $3.60 billion, and for 2028 — from $3.98 billion to $4.12 billion.

However, the improved revenue outlook has not yet been a reason for a more positive view on the stock. Sunrun trades at an оценкой of roughly 5.5x annual revenue versus an average of about 4.8x for large U.S. solar energy companies. Therefore, the analyst does not yet see meaningful undervaluation relative to peers.

At the same time, a long-term driver could be the development of direct sales of solar equipment, which management views as potentially more profitable after completing the initial investments in its in-house sales team. Additional opportunities are linked to Sunrun gaining share in the U.S. residential solar and energy storage market.

Against this backdrop, the Freedom analyst maintains a “Hold” recommendation but lowers the Sunrun target price from $13 to $10.

Solar energy and the tech sector: investors assess companies’ growth prospects

A sharp gap persists in the tech market between companies already showing sustainable growth and businesses that are in the midst of restructuring. Earlier, Freedom lowered the target price of Gaia (GAIA) shares from $6 to $4, while maintaining a “Buy” recommendation. At a price of $1.20, the new target implied upside of about 233%, but analysts expect the business recovery to take more time than previously assumed. 

In the second quarter of 2026, Gaia’s revenue fell 5.3% year over year to $23.3 million, and the net loss widened from $1.8 million to $3 million. Free cash flow was negative $7.7 million, and the cash balance declined to $5.3 million. Against this backdrop, Freedom lowered its 2026 revenue forecast for the company from $102.8 million to $91.6 million and no longer expects Gaia to reach net profitability in 2027. Analysts see long-term potential in the shift to direct subscriptions, cost reductions, and the development of new revenue sources. 

At the same time, the development of artificial intelligence continues to spur investment in infrastructure. Vantage Data Centers is considering an initial public offering at a valuation of about $100 billion or a sale to a strategic investor. If it goes public, the company could potentially raise around $10 billion, and the offering could become the largest in the history of the data center sector. 

Vantage already has more than 2 GW of power capacity and about 20 million square feet of space across 19 markets in North America, Europe, and the Asia-Pacific region. The key industry driver remains the development of artificial intelligence, which is increasing tech companies’ need for computing power and new data centers.

Not an individual investment recommendation.