Enlight Renewable Energy (TASE:ENLT) just made headlines as its U.S. subsidiary, Clēnera Holdings, locked in a major tax equity agreement with Wells Fargo to fund the $275 million Quail Ranch solar and storage project in New Mexico.

See our latest analysis for Enlight Renewable Energy.

The excitement around this deal comes after a remarkable rally in Enlight Renewable Energy’s shares, with a year-to-date share price return of nearly 82 percent and a one-year total shareholder return of 95 percent. Momentum has clearly been building, as investors react positively to both strategic U.S. expansion and solid financial growth.

If big renewable deals like this have you wondering what else is gaining traction, now is the perfect moment to branch out and discover fast growing stocks with high insider ownership

But after such a rapid rise in Enlight’s share price, investors must now ask: is there still room for upside, or has the market already priced in the company’s growth prospects for the years ahead?

Price-to-Earnings of 39.7x: Is it justified?

Enlight Renewable Energy currently trades at a price-to-earnings (P/E) ratio of 39.7x, while its most recent close was ₪112.9. This is substantially higher than the industry average and puts Enlight among premium-valued renewable energy stocks.

The P/E ratio compares a company’s current share price to its per-share earnings and is widely used to evaluate how much investors are willing to pay today for future earnings streams. For a growth-oriented utility like Enlight, a higher P/E can reflect optimism about expanding revenues and profits, or it can hint that shares are running hot relative to actual performance.

Compared to the Asian Renewable Energy industry average of 17.6x, Enlight’s P/E sits at more than double the sector norm. However, against its closest peers, with an average P/E of 45.7x, Enlight actually appears attractively priced within its competitive set. This suggests the market is demanding a premium for sector earnings but values Enlight below the peer mean, potentially due to its mix of growth and risk factors.

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

Result: Price-to-Earnings of 39.7x (ABOUT RIGHT)

However, risks remain, such as the possibility of slower earnings growth or market volatility. These factors could quickly dampen the recent positive sentiment.

Find out about the key risks to this Enlight Renewable Energy narrative.

Build Your Own Enlight Renewable Energy Narrative

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A great starting point for your Enlight Renewable Energy research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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