How Low Can Sunrun Stock Go?

Sunrun (NASDAQ: RUN) is the largest residential solar installer in the U.S. by market share. The company’s position has become increasingly precarious due to a combination of policy shifts, financial pressure, and evolving market conditions.

There’s more to consider – With a market capitalization of $2.5 billion, Sunrun has lost 36% of its value in the last year. Investors should be aware of the company’s sensitivity to economic downturns, as evident in the Covid-19 crisis when its stock plummeted by approximately 40% in a few quarters. This historical precedent raises concerns that Sunrun’s current share price of $11 could potentially drop to around $7 if similar market conditions recur. However, for investors who seek lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative, having outperformed the S&P 500 and generated returns exceeding 91% since its inception. Separately, see Is Intel Stock A Buy Now?

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Why Is It Relevant Now?

Recent legislative and executive actions have accelerated the expiration of key federal tax credits—specifically the 25D Residential Solar Credit and the 48E Investment Tax Credit—narrowing the window for Sunrun to capitalize on these critical incentives. An executive order signed on July 8 further complicates matters by tightening the definition of “under construction,” adding new compliance hurdles. At the same time, the introduction of steep tariffs on imported solar equipment threatens to raise costs and erode profit margins.

These developments strike at the core of Sunrun’s business model, which relies heavily on tax credits to support its leasing and power purchase agreements. As incentives diminish and operational costs rise, the company’s ability to maintain competitive pricing and profitability is under pressure.

How resilient is RUN stock during a downturn?

Sunrun has historically underperformed the S&P 500 in market downturns, highlighting its vulnerability to macro shocks. During the 2022 inflation-driven selloff, RUN plunged 67.4%, far steeper than the S&P 500’s 25.4% drop, and it has yet to reclaim its prior highs, now trading near $10.90. In the Covid-led downturn, RUN fell 38.7% but recovered quickly. While the stock can rebound, its track record points to high volatility and limited downside resilience. Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Protecting Wealth

No longer just a solar stock, Sunrun now represents a high-stakes reflection of where rooftop solar may head as federal policy becomes less predictable.. Although the company is actively adapting – expanding into energy storage, revising billing models, and adjusting its supply chain – investors remain uncertain about the speed and effectiveness of these strategic shifts. With mounting regulatory headwinds and expiring incentives, the market is closely watching whether Sunrun can transition fast enough to sustain growth and protect margins.

RUN stock trades at 1.1x price-to-sales, below its 3-year average of 1.5x and well under the S&P 500 average of 3.1x. That may suggest a discount, but it’s not “deep value” territory. Sunrun is still being priced as a growth company, and when growth looks uncertain, that premium becomes harder to justify. Given the broader economic uncertainties, ask yourself the question: Do you want to hold on to Sunrun stock now? Will you panic and sell if it starts dropping to $8, $7, or even lower levels? Holding on to a falling stock is never easy. Trefis works with Empirical Asset Management — a Boston area wealth manager — whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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