Sunrun (RUN) short, mcap=$6.5bn, price $30.74 vs $25.22

Pitch:
– Structurally unprofitable solar panel leasing and panel installation business.
– Terminal zero with 15% short interest.
– Generated ROIC is significantly below the cost of invested capital – only a 3% return for every $1 of CAPEX.
– High operating cash burn with near-term debt maturities.
– Negative exposure to rising interest rate environment.
– Interest expenses are 2x higher than the gross profit on solar panel leases.
– Survives only by the generosity of debt markets.
– Insiders are aggressively selling.

Valuation:
– Negative 30% operating margins and negative operating cashflows since 2016.
– No evident benefits of scale and further growth getting increasingly more expensive.

Exp. gain: 100%, terminal zero.

Full $RUN write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/SUNRUN_INC/2443409692

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