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Should Value Investors Buy Sunrun (RUN) Stock?

Zacks Equity Research
BLMN vs. WEN: Which Stock Is the Better Value Option?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Sunrun (RUN). RUN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 14.29 right now. For comparison, its industry sports an average P/E of 32.72. Over the past 52 weeks, RUN's Forward P/E has been as high as 14.30 and as low as 4.03, with a median of 10.79.

Investors should also note that RUN holds a PEG ratio of 0.82. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RUN's industry has an average PEG of 1.71 right now. Within the past year, RUN's PEG has been as high as 1.01 and as low as 0.11, with a median of 0.64.

Investors should also recognize that RUN has a P/B ratio of 1.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.37. RUN's P/B has been as high as 1.42 and as low as 0.62, with a median of 1.09, over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Sunrun is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RUN feels like a great value stock at the moment.

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