When you buy shares in a company, it’s worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. For instance, the price of Doral Group Renewable Energy Resources Ltd (TLV:DORL) stock is up an impressive 153% over the last five years. Also pleasing for shareholders was the 45% gain in the last three months. But this could be related to the strong market, which is up 29% in the last three months.

Since the stock has added ₪212m to its market cap in the past week alone, let’s see if underlying performance has been driving long-term returns.

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Doral Group Renewable Energy Resources wasn’t profitable in the last twelve months, it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally hope to see good revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

For the last half decade, Doral Group Renewable Energy Resources can boast revenue growth at a rate of 39% per year. Even measured against other revenue-focussed companies, that’s a good result. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 20% per year, compound, during the period. So it seems likely that buyers have paid attention to the strong revenue growth. To our minds that makes Doral Group Renewable Energy Resources worth investigating – it may have its best days ahead.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Doral Group Renewable Energy Resources’ balance sheet strength is a great place to start, if you want to investigate the stock further.

Doral Group Renewable Energy Resources provided a TSR of 56% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that’s still a gain, and it’s actually better than the average return of 20% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It’s always interesting to track share price performance over the longer term. But to understand Doral Group Renewable Energy Resources better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with Doral Group Renewable Energy Resources , and understanding them should be part of your investment process.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.

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.