Intrinsic value of Sunrun Inc. - RUN

Previous Close

$14.83

  Intrinsic Value

$9.35

stock screener

  Rating & Target

sell

-37%

Previous close

$14.83

 
Intrinsic value

$9.35

 
Up/down potential

-37%

 
Rating

sell

We calculate the intrinsic value of RUN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  57.70
  52.43
  47.69
  43.42
  39.58
  36.12
  33.01
  30.21
  27.69
  25.42
  23.38
  21.54
  19.88
  18.40
  17.06
  15.85
  14.77
  13.79
  12.91
  12.12
  11.41
  10.77
  10.19
  9.67
  9.20
  8.78
  8.40
  8.06
  7.76
  7.48
Revenue, $m
  1,199
  1,827
  2,698
  3,870
  5,401
  7,352
  9,778
  12,732
  16,257
  20,389
  25,155
  30,573
  36,652
  43,394
  50,796
  58,847
  67,536
  76,849
  86,770
  97,286
  108,383
  120,052
  132,285
  145,078
  158,431
  172,346
  186,832
  201,899
  217,562
  233,841
Variable operating expenses, $m
  880
  1,336
  1,969
  2,820
  3,932
  5,348
  7,110
  9,255
  11,814
  14,814
  18,265
  22,199
  26,613
  31,509
  36,883
  42,729
  49,038
  55,800
  63,004
  70,640
  78,698
  87,170
  96,053
  105,342
  115,037
  125,141
  135,659
  146,600
  157,973
  169,793
Fixed operating expenses, $m
  334
  342
  349
  357
  365
  373
  381
  389
  398
  406
  415
  425
  434
  443
  453
  463
  473
  484
  494
  505
  516
  528
  539
  551
  563
  576
  588
  601
  615
  628
Total operating expenses, $m
  1,214
  1,678
  2,318
  3,177
  4,297
  5,721
  7,491
  9,644
  12,212
  15,220
  18,680
  22,624
  27,047
  31,952
  37,336
  43,192
  49,511
  56,284
  63,498
  71,145
  79,214
  87,698
  96,592
  105,893
  115,600
  125,717
  136,247
  147,201
  158,588
  170,421
Operating income, $m
  -16
  149
  380
  693
  1,105
  1,631
  2,288
  3,088
  4,045
  5,168
  6,474
  7,949
  9,605
  11,442
  13,460
  15,655
  18,024
  20,565
  23,271
  26,141
  29,169
  32,354
  35,693
  39,185
  42,830
  46,629
  50,584
  54,698
  58,974
  63,420
EBITDA, $m
  237
  529
  937
  1,488
  2,210
  3,132
  4,281
  5,681
  7,353
  9,314
  11,577
  14,151
  17,040
  20,244
  23,763
  27,592
  31,724
  36,153
  40,872
  45,875
  51,154
  56,706
  62,526
  68,613
  74,967
  81,588
  88,482
  95,652
  103,106
  110,853
Interest expense (income), $m
  26
  158
  320
  553
  875
  1,308
  1,875
  2,597
  3,495
  4,588
  5,892
  7,421
  9,184
  11,189
  13,438
  15,933
  18,671
  21,650
  24,865
  28,311
  31,982
  35,872
  39,978
  44,296
  48,822
  53,556
  58,496
  63,645
  69,004
  74,579
  80,375
Earnings before tax, $m
  -173
  -171
  -173
  -182
  -204
  -244
  -309
  -406
  -542
  -724
  -946
  -1,235
  -1,584
  -1,996
  -2,473
  -3,016
  -3,626
  -4,300
  -5,039
  -5,841
  -6,703
  -7,625
  -8,603
  -9,637
  -10,726
  -11,867
  -13,061
  -14,307
  -15,605
  -16,955
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -173
  -171
  -173
  -182
  -204
  -244
  -309
  -406
  -542
  -724
  -946
  -1,235
  -1,584
  -1,996
  -2,473
  -3,016
  -3,626
  -4,300
  -5,039
  -5,841
  -6,703
  -7,625
  -8,603
  -9,637
  -10,726
  -11,867
  -13,061
  -14,307
  -15,605
  -16,955

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  7,491
  11,418
  16,863
  24,185
  33,756
  45,949
  61,115
  79,575
  101,606
  127,432
  157,219
  191,081
  229,076
  271,216
  317,474
  367,795
  422,102
  480,305
  542,312
  608,035
  677,394
  750,325
  826,781
  906,737
  990,191
  1,077,162
  1,167,698
  1,261,867
  1,359,763
  1,461,503
Adjusted assets (=assets-cash), $m
  7,491
  11,418
  16,863
  24,185
  33,756
  45,949
  61,115
  79,575
  101,606
  127,432
  157,219
  191,081
  229,076
  271,216
  317,474
  367,795
  422,102
  480,305
  542,312
  608,035
  677,394
  750,325
  826,781
  906,737
  990,191
  1,077,162
  1,167,698
  1,261,867
  1,359,763
  1,461,503
Revenue / Adjusted assets
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
Average production assets, $m
  5,640
  8,597
  12,697
  18,210
  25,417
  34,598
  46,017
  59,917
  76,506
  95,951
  118,380
  143,876
  172,485
  204,214
  239,045
  276,935
  317,826
  361,650
  408,340
  457,826
  510,051
  564,965
  622,533
  682,737
  745,574
  811,060
  879,230
  950,135
  1,023,847
  1,100,454
Working capital, $m
  -228
  -347
  -513
  -735
  -1,026
  -1,397
  -1,858
  -2,419
  -3,089
  -3,874
  -4,779
  -5,809
  -6,964
  -8,245
  -9,651
  -11,181
  -12,832
  -14,601
  -16,486
  -18,484
  -20,593
  -22,810
  -25,134
  -27,565
  -30,102
  -32,746
  -35,498
  -38,361
  -41,337
  -44,430
Total debt, $m
  4,327
  7,469
  11,825
  17,682
  25,339
  35,093
  47,226
  61,994
  79,619
  100,280
  124,110
  151,199
  181,595
  215,307
  252,314
  292,570
  336,016
  382,578
  432,184
  484,762
  540,250
  598,594
  659,759
  723,724
  790,487
  860,064
  932,492
  1,007,827
  1,086,144
  1,167,537
Total liabilities, $m
  5,993
  9,135
  13,490
  19,348
  27,005
  36,759
  48,892
  63,660
  81,285
  101,945
  125,776
  152,865
  183,261
  216,972
  253,979
  294,236
  337,682
  384,244
  433,850
  486,428
  541,915
  600,260
  661,425
  725,390
  792,153
  861,730
  934,158
  1,009,493
  1,087,810
  1,169,203
Total equity, $m
  1,498
  2,284
  3,373
  4,837
  6,751
  9,190
  12,223
  15,915
  20,321
  25,486
  31,444
  38,216
  45,815
  54,243
  63,495
  73,559
  84,420
  96,061
  108,462
  121,607
  135,479
  150,065
  165,356
  181,347
  198,038
  215,432
  233,540
  252,373
  271,953
  292,301
Total liabilities and equity, $m
  7,491
  11,419
  16,863
  24,185
  33,756
  45,949
  61,115
  79,575
  101,606
  127,431
  157,220
  191,081
  229,076
  271,215
  317,474
  367,795
  422,102
  480,305
  542,312
  608,035
  677,394
  750,325
  826,781
  906,737
  990,191
  1,077,162
  1,167,698
  1,261,866
  1,359,763
  1,461,504
Debt-to-equity ratio
  2.890
  3.270
  3.510
  3.660
  3.750
  3.820
  3.860
  3.900
  3.920
  3.930
  3.950
  3.960
  3.960
  3.970
  3.970
  3.980
  3.980
  3.980
  3.980
  3.990
  3.990
  3.990
  3.990
  3.990
  3.990
  3.990
  3.990
  3.990
  3.990
  3.990
Adjusted equity ratio
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -173
  -171
  -173
  -182
  -204
  -244
  -309
  -406
  -542
  -724
  -946
  -1,235
  -1,584
  -1,996
  -2,473
  -3,016
  -3,626
  -4,300
  -5,039
  -5,841
  -6,703
  -7,625
  -8,603
  -9,637
  -10,726
  -11,867
  -13,061
  -14,307
  -15,605
  -16,955
Depreciation, amort., depletion, $m
  253
  380
  557
  795
  1,105
  1,501
  1,993
  2,592
  3,307
  4,146
  5,103
  6,202
  7,435
  8,802
  10,304
  11,937
  13,699
  15,588
  17,601
  19,734
  21,985
  24,352
  26,833
  29,428
  32,137
  34,959
  37,898
  40,954
  44,131
  47,433
Funds from operations, $m
  79
  209
  385
  613
  902
  1,257
  1,684
  2,186
  2,765
  3,422
  4,156
  4,967
  5,851
  6,806
  7,830
  8,920
  10,074
  11,288
  12,561
  13,893
  15,282
  16,727
  18,230
  19,791
  21,411
  23,092
  24,837
  26,647
  28,527
  30,478
Change in working capital, $m
  -83
  -119
  -166
  -223
  -291
  -371
  -461
  -561
  -670
  -785
  -906
  -1,029
  -1,155
  -1,281
  -1,406
  -1,530
  -1,651
  -1,769
  -1,885
  -1,998
  -2,109
  -2,217
  -2,324
  -2,431
  -2,537
  -2,644
  -2,752
  -2,863
  -2,976
  -3,093
Cash from operations, $m
  163
  329
  550
  836
  1,193
  1,628
  2,145
  2,747
  3,435
  4,207
  5,062
  5,996
  7,006
  8,087
  9,237
  10,450
  11,725
  13,057
  14,446
  15,891
  17,390
  18,944
  20,554
  22,222
  23,948
  25,736
  27,589
  29,510
  31,503
  33,571
Maintenance CAPEX, $m
  -154
  -243
  -371
  -547
  -785
  -1,096
  -1,491
  -1,983
  -2,583
  -3,298
  -4,136
  -5,103
  -6,202
  -7,435
  -8,802
  -10,304
  -11,937
  -13,699
  -15,588
  -17,601
  -19,734
  -21,985
  -24,352
  -26,833
  -29,428
  -32,137
  -34,959
  -37,898
  -40,954
  -44,131
New CAPEX, $m
  -2,064
  -2,957
  -4,100
  -5,513
  -7,207
  -9,180
  -11,420
  -13,900
  -16,588
  -19,445
  -22,429
  -25,496
  -28,608
  -31,730
  -34,831
  -37,890
  -40,891
  -43,825
  -46,689
  -49,487
  -52,225
  -54,914
  -57,568
  -60,204
  -62,837
  -65,486
  -68,170
  -70,905
  -73,712
  -76,607
Cash from investing activities, $m
  -2,218
  -3,200
  -4,471
  -6,060
  -7,992
  -10,276
  -12,911
  -15,883
  -19,171
  -22,743
  -26,565
  -30,599
  -34,810
  -39,165
  -43,633
  -48,194
  -52,828
  -57,524
  -62,277
  -67,088
  -71,959
  -76,899
  -81,920
  -87,037
  -92,265
  -97,623
  -103,129
  -108,803
  -114,666
  -120,738
Free cash flow, $m
  -2,055
  -2,872
  -3,920
  -5,225
  -6,799
  -8,648
  -10,766
  -13,136
  -15,736
  -18,536
  -21,503
  -24,603
  -27,804
  -31,077
  -34,397
  -37,743
  -41,103
  -44,467
  -47,831
  -51,197
  -54,568
  -57,955
  -61,366
  -64,815
  -68,317
  -71,887
  -75,540
  -79,293
  -83,163
  -87,167
Issuance/(repayment) of debt, $m
  2,195
  3,142
  4,356
  5,857
  7,657
  9,754
  12,133
  14,768
  17,625
  20,660
  23,830
  27,089
  30,396
  33,712
  37,007
  40,257
  43,445
  46,562
  49,606
  52,578
  55,487
  58,345
  61,165
  63,965
  66,763
  69,577
  72,428
  75,335
  78,317
  81,393
Issuance/(repurchase) of shares, $m
  723
  957
  1,262
  1,646
  2,118
  2,682
  3,342
  4,099
  4,949
  5,889
  6,904
  8,007
  9,183
  10,424
  11,725
  13,081
  14,487
  15,941
  17,441
  18,985
  20,575
  22,211
  23,894
  25,629
  27,416
  29,261
  31,168
  33,141
  35,184
  37,303
Cash from financing (excl. dividends), $m  
  2,918
  4,099
  5,618
  7,503
  9,775
  12,436
  15,475
  18,867
  22,574
  26,549
  30,734
  35,096
  39,579
  44,136
  48,732
  53,338
  57,932
  62,503
  67,047
  71,563
  76,062
  80,556
  85,059
  89,594
  94,179
  98,838
  103,596
  108,476
  113,501
  118,696
Total cash flow (excl. dividends), $m
  862
  1,227
  1,697
  2,279
  2,976
  3,788
  4,710
  5,731
  6,837
  8,013
  9,231
  10,494
  11,774
  13,059
  14,335
  15,594
  16,829
  18,037
  19,216
  20,367
  21,494
  22,601
  23,693
  24,778
  25,862
  26,952
  28,056
  29,182
  30,338
  31,529
Retained Cash Flow (-), $m
  -723
  -957
  -1,262
  -1,646
  -2,118
  -2,682
  -3,342
  -4,099
  -4,949
  -5,889
  -6,904
  -8,007
  -9,183
  -10,424
  -11,725
  -13,081
  -14,487
  -15,941
  -17,441
  -18,985
  -20,575
  -22,211
  -23,894
  -25,629
  -27,416
  -29,261
  -31,168
  -33,141
  -35,184
  -37,303
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  140
  270
  436
  633
  858
  1,106
  1,367
  1,632
  1,888
  2,124
  2,327
  2,486
  2,592
  2,635
  2,610
  2,514
  2,342
  2,096
  1,775
  1,382
  919
  390
  -201
  -851
  -1,555
  -2,309
  -3,112
  -3,958
  -4,846
  -5,774
Discount rate, %
  10.50
  11.03
  11.58
  12.16
  12.76
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.07
  25.27
  26.53
  27.86
  29.25
  30.72
  32.25
  33.86
  35.56
  37.33
  39.20
  41.16
  43.22
PV of cash for distribution, $m
  126
  219
  314
  400
  471
  520
  544
  542
  516
  470
  410
  343
  274
  210
  154
  107
  70
  43
  25
  12
  5
  1
  0
  -1
  -1
  -1
  -1
  0
  0
  0
Current shareholders' claim on cash, %
  70.0
  51.5
  39.3
  30.8
  24.7
  20.2
  16.8
  14.1
  12.0
  10.3
  9.0
  7.8
  6.9
  6.1
  5.5
  4.9
  4.4
  4.0
  3.6
  3.3
  3.0
  2.8
  2.5
  2.3
  2.1
  2.0
  1.8
  1.7
  1.6
  1.5

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.

FINANCIAL RATIOS  of  Sunrun Inc. (RUN)

Valuation Ratios
P/E Ratio 16.8
Price to Sales 3.4
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow -10.2
Price to Free Cash Flow -1.7
Growth Rates
Sales Growth Rate 48.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 21.7%
Cap. Spend. - 3 Yr. Gr. Rate 17.8%
Financial Strength
Quick Ratio 7
Current Ratio 0
LT Debt to Equity 153.8%
Total Debt to Equity 158.2%
Interest Coverage -9
Management Effectiveness
Return On Assets 3.9%
Ret/ On Assets - 3 Yr. Avg. -0.2%
Return On Total Capital 6.1%
Ret/ On T. Cap. - 3 Yr. Avg. -2.9%
Return On Equity 15%
Return On Equity - 3 Yr. Avg. -6.8%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 12.1%
Gross Margin - 3 Yr. Avg. 10.8%
EBITDA Margin -30.2%
EBITDA Margin - 3 Yr. Avg. -46.7%
Operating Margin -47.4%
Oper. Margin - 3 Yr. Avg. -62.7%
Pre-Tax Margin -58.8%
Pre-Tax Margin - 3 Yr. Avg. -75.5%
Net Profit Margin 20.3%
Net Profit Margin - 3 Yr. Avg. -8.2%
Effective Tax Rate -13.5%
Eff/ Tax Rate - 3 Yr. Avg. -1.7%
Payout Ratio 0%

RUN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RUN stock intrinsic value calculation we used $760 million for the last fiscal year's total revenue generated by Sunrun Inc.. The default revenue input number comes from 0001 income statement of Sunrun Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our RUN stock valuation model: a) initial revenue growth rate of 57.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.5%, whose default value for RUN is calculated based on our internal credit rating of Sunrun Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Sunrun Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of RUN stock the variable cost ratio is equal to 73.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $327 million in the base year in the intrinsic value calculation for RUN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.4% for Sunrun Inc..

Corporate tax rate of 27% is the nominal tax rate for Sunrun Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the RUN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for RUN are equal to 470.6%.

Life of production assets of 23.2 years is the average useful life of capital assets used in Sunrun Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for RUN is equal to -19%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $948.707 million for Sunrun Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 113.744 million for Sunrun Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Sunrun Inc. at the current share price and the inputted number of shares is $1.7 billion.

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