Critical Survey: Sunrun (RUN) vs. SolarCity (SCTY)

Sunrun (NASDAQ: RUN) and SolarCity (NASDAQ:SCTY) are both oils/energy companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Analyst Ratings

This is a breakdown of current ratings and price targets for Sunrun and SolarCity, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunrun 0 0 4 0 3.00
SolarCity 0 0 0 0 N/A

Sunrun presently has a consensus target price of $9.00, indicating a potential upside of 58.17%. Given Sunrun’s higher possible upside, analysts clearly believe Sunrun is more favorable than SolarCity.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sunrun $453.90 million 1.34 $91.68 million $0.87 6.54
SolarCity N/A N/A N/A ($0.31) -65.71

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

Profitability

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

Net Margins Return on Equity Return on Assets
Sunrun 18.79% 9.25% 2.69%
SolarCity -112.36% 22.92% -10.69%

Insider & Institutional Ownership

78.1% of Sunrun shares are owned by institutional investors. Comparatively, 40.0% of SolarCity shares are owned by institutional investors. 24.1% of Sunrun shares are owned by company insiders. Comparatively, 36.4% of SolarCity shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Sunrun beats SolarCity on 7 of the 9 factors compared between the two stocks.

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.

SolarCity Company Profile

SolarCity Corporation is a United States-based solar provider. The Company is primarily engaged in the design, manufacture, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. It operates through solar energy products and services segment. It integrates the sales, engineering, manufacturing, installation, monitoring, maintenance and financing of its distributed solar energy systems. It offers its customers the option to either purchase and own solar energy systems or to purchase the energy that its solar energy systems produce through various contractual arrangements. It installs solar energy system at its customer’s premises and charge the customer a monthly fee for the power that its system produces. Its products, services and technologies include solar energy systems, customer agreements, grid control/energy storage systems, Zep Solar mounting systems and software.

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