Is Sunrun (RUN) Poised to Beat Q4 Earnings Estimates?

The renewable energy industry can be difficult for many investors to conquer, and this task has become even more challenging after tariffs were imposed on solar energy products imported by U.S. companies.

One company that will be impacted by the tariffs is Sunrun RUN, a domestic solar energy firm that seeks to provide “solar as a service” and offers its consumers the chance personalize their solar system.  The company now boasts 160,000 residential customers in 22 states.

Sunrun’s CEO came out against President Trump’s solar tariff, claiming it would harm U.S. solar energy jobs. But the impact of the tariffs won’t be felt just yet, and most investors want to know how Sunrun is actually expected to perform in its upcoming fourth-quarter.

Sunrun is projected to see its Q4 sales surge 10.7% to reach $133.43 million. The solar energy firm is also expected to see its adjusted earnings skyrocket over 48% to hit $0.40 per share. Yet, investors still need to know if they should expect Sunrun to actually top this outstanding EPS estimate.

Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat. Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates.

This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

Currently, Sunrun is a Zacks Rank #2 (Buy) and rocks an “A” grade for Momentum in our Style Scores system. Coupled with the firm’s relatively high Earnings ESP of 45%, which means earnings estimates have been higher directly ahead of Sunrun’s Q4 results, investors should consider the stock as one that seems poised to beat earnings estimates.

Investors should also happily note that Sunrun has topped or matched earnings estimates in the previous nine quarters, with an average earnings surprise of over 75% in the trailing four periods.

Sunrun is set to report its Q4 and fiscal 2017 earnings results after market close on Tuesday, March 6.

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