Analyzing Sunrun (RUN) & SunPower Corporation (NASDAQ:SPWR)

SunPower Corporation (NASDAQ: SPWR) and Sunrun (NASDAQ:RUN) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, profitability, analyst recommendations and earnings.

Analyst Recommendations

This is a summary of current recommendations and price targets for SunPower Corporation and Sunrun, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SunPower Corporation 1 8 3 0 2.17
Sunrun 0 0 4 0 3.00

SunPower Corporation currently has a consensus price target of $8.91, suggesting a potential upside of 6.62%. Sunrun has a consensus price target of $9.00, suggesting a potential upside of 45.87%. Given Sunrun’s stronger consensus rating and higher probable upside, analysts clearly believe Sunrun is more favorable than SunPower Corporation.

Risk and Volatility

SunPower Corporation has a beta of 3.1, meaning that its share price is 210% more volatile than the S&P 500. Comparatively, Sunrun has a beta of -0.68, meaning that its share price is 168% less volatile than the S&P 500.

Institutional and Insider Ownership

27.9% of SunPower Corporation shares are held by institutional investors. Comparatively, 74.9% of Sunrun shares are held by institutional investors. 0.9% of SunPower Corporation shares are held by insiders. Comparatively, 24.1% of Sunrun shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares SunPower Corporation and Sunrun’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SunPower Corporation -24.91% -20.81% -4.40%
Sunrun 18.79% 9.25% 2.69%

Valuation and Earnings

This table compares SunPower Corporation and Sunrun’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
SunPower Corporation $2.56 billion 0.46 -$471.06 million ($4.02) -2.08
Sunrun $453.90 million 1.45 $91.68 million $0.87 7.09

Sunrun has higher revenue, but lower earnings than SunPower Corporation. SunPower Corporation is trading at a lower price-to-earnings ratio than Sunrun, indicating that it is currently the more affordable of the two stocks.

Summary

Sunrun beats SunPower Corporation on 11 of the 13 factors compared between the two stocks.

SunPower Corporation Company Profile

SunPower Corporation is a global energy company. The Company delivers complete solar solutions to residential, commercial, and power plant customers. The Company’s segments include Residential Segment, Commercial Segment and Power Plant Segment. The Residential and Commercial Segments combined are referred to as Distributed Generation. The Company offers solar module technology and solar power systems that are designed to generate electricity over a system life over 25 years; Integrated Smart Energy software solutions that enable customers to manage and optimize the cooperation center of excellence (CCOE) measurement; Installation, construction, and ongoing maintenance and monitoring services; and financing solutions that provide customers a range of options for purchasing or leasing solar products at competitive energy rates. The Company offers a set of residential solutions that deliver value to homeowners and its dealer partners.

Sunrun Company Profile

Sunrun Inc. is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (Projects) in the United States. The Company is engaged in providing solar energy services and products to its customers. As of December 31, 2016, it operated a fleet of residential solar energy systems in the United States, with approximately 134,000 customers across 16 states, as well as the District of Columbia. The Company sells to homeowners over the phone, in the field through canvassing and in-home sales and through retail sales channels through its strategic partners. The solar service offerings are provided through its lease and power purchase agreements. It sells solar service offerings and installs solar energy systems for homeowners through its direct-to-consumer channel. It sells solar energy systems to homeowners, as well as related products, such as solar panels, inverters, racking systems and other solar-related equipment to resellers.

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