Enlight Renewable Energy's (TLV:ENLT) five-year earnings growth trails the stellar shareholder returns

It hasn't been the best quarter for Enlight Renewable Energy Ltd (TLV:ENLT) shareholders, since the share price has fallen 14% in that time. But in stark contrast, the returns over the last half decade have impressed. Indeed, the share price is up an impressive 244% in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now.

The past week has proven to be lucrative for Enlight Renewable Energy investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Enlight Renewable Energy

SWOT Analysis for Enlight Renewable Energy

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last half decade, Enlight Renewable Energy became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that Enlight Renewable Energy has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While it's never nice to take a loss, Enlight Renewable Energy shareholders can take comfort that their trailing twelve month loss of 12% wasn't as bad as the market loss of around 17%. Longer term investors wouldn't be so upset, since they would have made 28%, each year, over five years. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Enlight Renewable Energy you should be aware of, and 2 of them make us uncomfortable.

Of course Enlight Renewable Energy may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Israeli exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.