Please ensure Javascript is enabled for purposes of website accessibility

Why Sunrun's Shares Plunged 9.9% on Monday

By Travis Hoium - Updated Jan 25, 2021 at 4:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earnings don't look as good as investors hoped.

What happened 

Shares of residential solar installer Sunrun (RUN -0.71%) plunged as much as 9.9% in trading on Monday after the company announced preliminary fourth-quarter 2020 results. Shares closed near their lows for the day, down 9%. 

So what

Management said that the company deployed 171.6 megawatts during the fourth quarter, up 10% from a year ago. Net earning assets, a measure of the present value of projects, were $2.9 billion. 

Residential roof with solar panels.

Image source: Getty Images.

Results may not be surprising and some growth is good considering the pandemic, but Sunrun's stock is up 367% over the past year, so investors were likely expecting a lot more. When final earnings numbers are released, it'll be important for investors to understand what the growth prospects of Sunrun look like this year and beyond. 

Now what

It looks right now like the market may have gotten a little ahead of itself. Solar energy stocks have surged over the last six months as investors have bet that a new administration and falling costs would combine to drive growth and margin expansion in the industry. That narrative may take time to play out, and traders may be underwhelmed by the performance of companies like Sunrun in the short term. This is still an industry with tailwinds, but for now, volatility is the name of the game for solar stocks. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sunrun Inc. Stock Quote
Sunrun Inc.
$20.92 (-0.71%) $0.15

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.