NOVA - Sunrun: A Chalky Business Model In A Growing Market
- Profitability in the solar sector depends on the business model. Upstream companies, primarily solar manufacturing companies in low-cost regions, are more profitable than downstream companies such as Sunrun.
- Many investors overestimate the effect of decreasing solar panel prices on upstream solar companies. Most of Sunrun's costs are labor expenses.
- Growth hasn't been even in the past. The Vivint acquisition will boost revenue growth this year, but it is hard to interpolate a figure beyond that.
- The company will probably become cash-flow positive someday, but ROA will be inferior to businesses with lighter capital requirements.
For further details see:
Sunrun: A Chalky Business Model In A Growing Market