Financial Comparison: First Solar (NASDAQ:FSLR) & Sunrun (RUN)

First Solar (NASDAQ: FSLR) and Sunrun (NASDAQ:RUN) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.

Earnings & Valuation

This table compares First Solar and Sunrun’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Solar $2.95 billion 2.42 -$357.96 million ($4.38) -15.62
Sunrun $453.90 million 1.33 $91.68 million $0.87 6.52

Sunrun has lower revenue, but higher earnings than First Solar. First Solar is trading at a lower price-to-earnings ratio than Sunrun, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

First Solar has a beta of 2.03, indicating that its share price is 103% more volatile than the S&P 500. Comparatively, Sunrun has a beta of -0.69, indicating that its share price is 169% less volatile than the S&P 500.

Institutional and Insider Ownership

51.2% of First Solar shares are held by institutional investors. Comparatively, 78.1% of Sunrun shares are held by institutional investors. 0.6% of First Solar shares are held by insiders. Comparatively, 24.1% of Sunrun shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares First Solar and Sunrun’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Solar -14.70% 8.07% 6.30%
Sunrun 18.79% 9.25% 2.69%

Analyst Ratings

This is a summary of current recommendations for First Solar and Sunrun, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Solar 0 9 8 0 2.47
Sunrun 0 0 4 0 3.00

First Solar currently has a consensus target price of $56.12, suggesting a potential downside of 18.00%. Sunrun has a consensus target price of $9.00, suggesting a potential upside of 58.73%. Given Sunrun’s stronger consensus rating and higher probable upside, analysts plainly believe Sunrun is more favorable than First Solar.

Summary

Sunrun beats First Solar on 8 of the 14 factors compared between the two stocks.

About First Solar

First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company’s solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.

About Sunrun

Sunrun Inc. is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (Projects) in the United States. The Company is engaged in providing solar energy services and products to its customers. As of December 31, 2016, it operated a fleet of residential solar energy systems in the United States, with approximately 134,000 customers across 16 states, as well as the District of Columbia. The Company sells to homeowners over the phone, in the field through canvassing and in-home sales and through retail sales channels through its strategic partners. The solar service offerings are provided through its lease and power purchase agreements. It sells solar service offerings and installs solar energy systems for homeowners through its direct-to-consumer channel. It sells solar energy systems to homeowners, as well as related products, such as solar panels, inverters, racking systems and other solar-related equipment to resellers.

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