What happened 

Shares of Sunrun (NASDAQ:RUN) climbed 9.3% on Thursday, furthering the solar power company's recent gains.

So what

Yesterday, Morgan Stanley analyst Stephen Byrd pounded the table for Sunrun's stock. He reiterated his overweight rating for the residential solar developer and lifted his share price forecast from $86 to $91. "We view Sunrun as the most compelling clean energy stock we cover," Byrd said. 

If he's correct, Byrd's new estimate would equate to returns of approximately 75% for investors, based on the stock's current price near $52.

The sun is shining on solar panels on the roof of a home.

Image source: Getty Images.

Byrd highlighted multiple trends that could help to propel Sunrun's revenue and profit growth, including:

  • increasing utility costs from traditional energy sources,
  • declining solar energy production and storage costs,
  • climate change and a corresponding rise in demand for clean energy from consumers.

Better still, Byrd sees the quickly expanding electric vehicle (EV) market as another powerful growth driver for Sunrun.

Now what 

Solar accounted for more than half of all new electricity-generating capacity added in the U.S. in the first quarter, according to The Solar Energy Industries Association. That's likely to remain the case, as technological advances are expected to continue to drive solar power prices lower over time. The growth of the EV market should also boost demand for solar energy, as more EV owners install rooftop solar panels on their homes to help charge their vehicles. 

As a leader in residential solar, Sunrun is particularly well-positioned to profit from these long-term trends.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.