Which solar stock actually deserves your attention right now: First Solar or Sunrun? Three rounds settle it, and the finish isn't close.
Solar has punished stock pickers this cycle. Some names kept their fundamentals intact through the pullback. Others didn't.
First Solar and Sunrun sit in the same industry, trade in the same sentiment-driven tape, and land on almost opposite ends of nearly every score Stoxcraft tracks. Three rounds below break down exactly where that gap comes from, then the verdict ties it together.
Round 1: net profit margin. Who actually keeps the money
First Solar posted a $1.60 billion net profit on $5.22 billion in revenue, a 30.73% net margin. Sunrun posted a $1.01 billion net loss on $2.96 billion in revenue, a net margin of roughly -34.1%. That's a swing of more than 64 points between two companies making panels and installing rooftops in the same industry.
Net margin measures what survives every cost: materials, labor, financing, taxes. A company that can't turn revenue into profit during a favorable solar demand backdrop has a business model problem, not just a rough quarter.
Round 2: Altman Z-Score. Whose balance sheet can survive a downturn
Five ratios, one number, no spin. The Altman Z-Score compresses balance sheet and earnings data into a single bankruptcy-risk read: First Solar scores 6.34, comfortably inside the zone the model treats as safe, while Sunrun scores 0.05, deep in the distress zone that flags elevated bankruptcy risk.
The numbers behind it aren't subtle. First Solar carries $498.6 million in debt against $9.5 billion in equity, debt that barely registers next to its balance sheet.
Sunrun carries $14.9 billion in debt against just $5.0 billion in equity, debt outweighing equity by almost 3 to 1, with operating cash flow negative for the year and interest coverage negative too. Current earnings can't even cover the interest bill.
Round 3: how far each stock has fallen from its high. Sunrun fights back
This round isn't about which business is healthier. It's pure math: how much room is left for a stock to climb back to its own high. Sunrun has fallen further, 60.69% below its 52-week high versus First Solar's 37.09%, so on that narrow measure alone it has more room to run if sentiment ever turns.
That gap exists for a reason though. First Solar dropped mostly on valuation and sector rotation while its fundamentals kept improving, including a 0.90-point Health Score gain this month, the largest jump in Stoxcraft's Top 50 screen.
Sunrun's drop reflects the fundamentals catching up with the stock, not a market overreaction waiting to correct. A bigger discount to a 52-week high isn't automatically a bigger opportunity, especially when the underlying business explains most of the drop.
The verdict: First Solar wins, not close
Two rounds to First Solar, one to Sunrun, and the deciding rounds aren't the close ones. On profitability and balance sheet survivability, the two metrics that matter most for staying power, First Solar isn't just ahead. It's in a different tier.
Context backs that up. First Solar carries a Health Score of 10, a perfect score, against Sunrun's 2.0. Both trade in the same industry and get scored on the same sector-relative scale, which makes that ten-point gap directly comparable.
Risk points the same direction: First Solar's Risk Score sits at 8.6, meaning still-elevated volatility in absolute terms, but 1.4 points below Sunrun's maximum 10.0, a smaller structural drawdown risk. First Solar carries a 3-star Overall Rating. Sunrun sits at half a star, about as low as Stoxcraft's scale goes.
None of that makes Sunrun un-investable by definition, and a 60.69% gap to its 52-week high is a real number, not a typo. But closing that gap would need a genuine turnaround, built on debt refinancing and a path back to positive cash flow, not just a lower price tag.
It's not just Sunrun either. Array Technologies, another Solar-industry name, carries a Health Score of just 1.6 and its own Risk Score at the maximum. First Solar isn't beating one weak peer, it's the outlier in a sector where distressed balance sheets are common right now, not the exception.
If you want to see how the rest of the Solar industry stacks up, the Stoxcraft Screener lets you run the same Health Score filter across the whole sector instead of just these two names. Sunrun details its own debt and liquidity position in its 10-K filed with the SEC, the primary source behind the numbers above. We covered First Solar's score jump in more depth last month, before the gap with Sunrun widened this far.
Same industry, same universe of stocks Stoxcraft tracks, and two completely different stories. That's the whole point of running the numbers instead of trusting the headline.
