H2Pro and Doral Group Renewable Energy Resources (TASE:DORL) gained attention after Doral Hydrogen agreed to co develop an off grid, solar powered hydrogen project in Extremadura, Spain, aimed at supplying the existing gas network.

See our latest analysis for Doral Group Renewable Energy Resources.

The new hydrogen agreement lands at a time when momentum in Doral Group Renewable Energy Resources is strong, with a 12.77% 1 month share price return and a 75.19% year to date share price return. Over the past year, total shareholder return is very large at around 5.6x, pointing to materially changed expectations around growth potential and risk compared to recent years.

If this hydrogen project has caught your eye, it could be a good moment to broaden your view of the energy transition and check out 26 power grid technology and infrastructure stocks

With the share price up sharply over the past year and excitement building around green hydrogen projects, the real question is whether Doral is still mispriced or if the market is already charging you for that future growth.

Preferred Price to Sales Multiple of 29.1x: Is It Justified?

Doral Group Renewable Energy Resources last closed at ₪64.82, and on a P/S basis the market is paying 29.1x its revenue, a level that already bakes in a lot of optimism compared with peers.

The P/S ratio compares the company’s market value with its revenue, which can be a useful guide for businesses that are not yet profitable but are building projects and capacity. For Doral, this matters because the company is still loss making, with a reported net loss of ₪348.12m against revenue of ₪455.09m, so earnings based measures such as P/E are not available.

According to the checks, Doral is described as expensive on a P/S of 29.1x versus a peer average of 26.9x, and even more so when compared with the wider Asian renewable energy industry average of 2.5x. That is a sizeable gap, and it suggests the market is assigning a much richer sales multiple to Doral than to most regional peers, despite the company being unprofitable and having earnings that have declined by 53.1% per year over the past 5 years.

For investors, the key question is whether that higher P/S is simply reflecting enthusiasm around projects like green hydrogen and solar infrastructure, or whether there is enough evidence in the current business profile to support such a premium over the sector.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Preferred multiple of 29.1x Price to Sales (OVERVALUED)

However, you also need to weigh Doral’s ongoing loss of ₪348.12m and its concentrated revenue in Israel at ₪455.09m, which adds both project and geographic risk.

Find out about the key risks to this Doral Group Renewable Energy Resources narrative.

Next Steps

With sentiment running high, it helps to look past the headline story and test the numbers yourself before forming a view. If you want to move quickly and see what might worry other investors, start by reviewing these 3 important warning signs

Looking for more investment ideas?

If Doral has sharpened your focus on where capital goes next, do not stop here. Let data driven stock ideas guide your next move.

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.

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