Needham analyst analyst Vikram Bagri said Sunrun is "the leader in the crowded US residential solar industry with about 15% share, almost 2x that of its closest competitor."
"We think the industry, which has expanded rapidly since 2016, can keep growing at a fast pace due to EV adoption, a focus on energy resilience, rising utility rates, and heightened environmental awareness," Bagri said, adding he believes Sunrun will benefit from these tailwinds "thanks to its experienced management team, strong customer relationships, established channel partners, and quality of service."
"Moreover, Sunrun's scale allows it to recycle capital efficiently," he said. "With Sunrun down over 50% from its highs we think the shares trade at a compelling entry point."
Sunrun shares were marked 4.75% higher in early Friday trading to change hands at $46.75 each, a move that would still leave the stock with a year-to-date decline of around 30.6%.
Separately, Bargi initiated coverage of First Solar (FSLR) - Get First Solar, Inc. Report with a hold rating, saying that he was awaiting "more evidence of cost reductions, easing of freight issues, and reduced execution risk."
Earlier this week, the White House debuted a plan to have nearly half of the country's electricity provided by solar energy by 2050.
The U.S. Department of Energy released the Solar Futures Study, which details the role solar energy will play in "decarbonizing" the country's power grid.
On Wednesday, Sunrun received two positive analyst mentions. The company was added to the U.S. Analyst Focus List by analysts at JPMorgan Chase, and it was also among clean energy stocks rated “market overweight” in new coverage at Wolfe Research.
Last month, Sunnrun posted a wider-than-expected second-quarter net loss as revenue more than doubled and named Mary Powell as its new chief executive offer.
Powell is a director of Sunrun and a former president and CEO of the Vermont utility company Green Mountain Power.