Sunrun (RUN) & First Solar (FSLR) Financial Review

Sunrun (NASDAQ: RUN) and First Solar (NASDAQ:FSLR) are both photovoltaic solar systems & equipment companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Sunrun and First Solar, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunrun 0 0 4 0 3.00
First Solar 0 10 9 0 2.47

Sunrun currently has a consensus price target of $9.00, suggesting a potential upside of 48.76%. First Solar has a consensus price target of $48.50, suggesting a potential downside of 19.41%. Given Sunrun’s stronger consensus rating and higher possible upside, analysts clearly believe Sunrun is more favorable than First Solar.

Earnings & Valuation

This table compares Sunrun and First Solar’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Sunrun $453.90 million 1.42 $91.68 million $0.88 6.88
First Solar $2.95 billion 2.13 -$357.96 million ($4.38) -13.74

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

Institutional & Insider Ownership

74.9% of Sunrun shares are held by institutional investors. Comparatively, 53.6% of First Solar shares are held by institutional investors. 24.1% of Sunrun shares are held by insiders. Comparatively, 0.6% of First Solar shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Sunrun and First Solar’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%
First Solar -14.70% 8.07% 6.30%

Summary

Sunrun beats First Solar on 8 of the 13 factors compared between the two stocks.

About Sunrun

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.

About First Solar

First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company’s solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.

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