- Sunrun (RUN) has a clear-cut resistance level which has held it back for at least a year.
- At the same time, the shift toward renewable energy is moving quickly. This should benefit Sunrun.
- Investors should accumulate RUN stock in anticipation of a powerful rally.
Recent geopolitical events have put a spotlight on renewable energy sources. Developed nations were already moving toward cleaner power sources, but the Russia-Ukraine crisis has expedited this shift.
Solar energy will undoubtedly be a crucial part of this transition. Sunrun’s financials aren’t perfect — there’s no denying it. Nevertheless, the company stands to benefit in a big way from recent international events.
What’s Happening With RUN Stock?
The critical number to watch with RUN stock is $60. The stock has approached this frustrating resistance level at least four times during the past 12 months.
After the Sunrun share price nearly hit $60 in November 2021, it embarked on a prolonged downturn. Not long ago, the stock traded fairly close to $30.
This represents a terrific bargain if you’re looking to pick up some shares on the cheap. As CEO Mary Powell explained, Sunrun had a fantastic 2021 despite Covid-19-related headwinds:
“The Sunrun team delivered record volumes in 2021, having added over 110,000 customers in the year representing 31% growth in new installations while bringing two large companies together and navigating a dynamic operating environment during COVID.”
Furthermore, Sunrun’s fourth-quarter 2021 GAAP results were impressive:
- Total revenue of $435.2 million, up 36% year-over-year (YoY)
- Customer agreements and incentives revenue was $200.6 million, up 22% YoY
- Solar energy systems and product sales revenue was $234.6 million, up 50% YoY
In full disclosure, the company did post a fourth-quarter 2021 net loss attributable to common stockholders of 19 cents-per-share. So, there’s room for improvement in this regard.
The Big Shift
As Steve Cicala of the National Bureau of Economic Research sees it, recent geopolitical events have made the world’s clean-energy transition a pressing concern. Going forward, the European Union “should be moving at the maximum possible speed to get themselves off of Russian gas,” Cicala declared.
Increasingly, developed nations are working diligently to wean themselves off of fossil fuels like petroleum and natural gas. Frankly, it’s not just about energy independence for economic reasons. It’s also about national security at this point.
In the words of David Victor, a professor of public policy at UC San Diego, “Security comes from diversity and diversity alone.”
Amid the backdrop of a developed world striving toward a cleaner and more secure future, Sunrun is definitely a company to watch. Fossil fuel prices have been going through the roof lately. So, installing solar panels is a cost-efficient prospect in the 2020s.
Ultimately, owning shares of RUN stock isn’t about rebelling against Russia or making a political statement (though you’re certainly free to do this if you choose). Rather, it’s about a long-term wager on the future of solar power. And, just as importantly, it’s about the big shift toward national security through energy-source diversification.
What You Can Do Now
It’s hard to imagine that the Sunrun share price won’t make another run for $60 in the near future. It’s a matter of “when,” not “if.”
Therefore, in light of a brightening outlook for national power-source diversity, and particularly solar energy, RUN stock deserves a spot in your renewables-focused portfolio.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.