Why Analysts Expect Sunrun’s Revenue to Fall in 1Q16
What Do Analysts Expect from Sunrun’s 1Q16 Earnings?
Sunrun’s revenue estimates
Sunrun (RUN) reported about $100 million in consolidated revenue for 4Q15. Analysts estimate that the company will report revenue of $83.4 million in 1Q16. This is a nearly 16% decline in revenue on a quarter-over-quarter basis.
The decline in 1Q16 revenue is mainly due to an anticipated decrease in MW (or megawatts) deployed during 1Q16. However, analysts expect the company’s revenue to increase from 2Q16. This is in line with Sunrun’s fiscal 2016 guidance.
2016 guidance
Sunrun (RUN) affirmed its fiscal 2016 guidance in its latest company filings. Although the company is anticipated to report lower MW deployed in 1Q16, Sunrun maintained its fiscal 2016 deployment target of 285 MW. This is an ~40% increase compared to 203 MW deployed during fiscal 2015.
Sunrun deployed 68 MW of solar (TAN) installations during 4Q15. However, the company expects to deploy 56 MW in 1Q16. Sunrun’s 1Q16 MW deployed guidance does not include 12 MW of Nevada backlog.
The anticipated decrease in MW deployed is due to Sunrun’s market exit from Nevada due to the elimination of the net metering system in the state. This also led to the market exit of its peers Vivint Solar (VSLR) and SolarCity (SCTY). However, SunPower (SPWR) didn’t exit the market.
Moving ahead, the company expects its built business to grow nearly at a 100% growth rate. Also, the company maintains its NPV (net present value) target of $1 per watt for fiscal 2016 despite its market exit from Nevada market.
In the next part of this series, we’ll take a closer look at Sunrun’s 1Q16 margin estimates.
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