Investing

Market-Beating Israeli Renewables Company Files for IPO

A profitable renewables developer with a multi-year market-beating track record has joined the initial public offering (IPO) cue. 

Enlight Renewable Energy made its F-1 filing with the Securities and Exchange Commission (SEC) on January 20, having submitted confidential IPO paperwork last July. It did not set a date for its launch but plans to list on the Nasdaq under the symbol “ENLT.” 

Enlight didn’t put out specifics on price and units in its prospectus. However, its filing fee included a target of $100 million (a typical placeholder sum that may be adjusted at a later date).

Enlight reported $27 million in profit, having generated $131 million in revenue for the nine months ending on September 30, 2022.

Founded in 2008, the Israel-based company has been trading on the Tel Aviv Stock Exchange (TASE) since 2010. It has wracked up eye-watering returns, with its share price soaring almost 400% over the past five years. With an average 37% compound annual growth rate (CAGR) over the period, Enlight has far outstripped the S&P 500 (7% CAGR) as well as the S&P Renewables index (17% CAGR). 

As both a producer and developer, Enlight plans, finances, builds and operates its projects. Such vertical integration enables the firm to maintain control and increase profit across “the entire project life cycle… from greenfield development to ownership and operations.” Enlight has projects across 12 different countries – mainly in Israel and parts of Europe and North America. It has a range of renewable energy segments, operating wind, solar, and energy storage projects. 

Enlight claims this spread enables it to optimize capital allocation to leverage synergies between its various geographies and technologies to increase overall output and maximize revenues.

Wind and Solar Boom 

The renewables sector saw an unprecedented surge last year. In its 2022 annual report, the International Energy Agency made historic upward revisions to its renewable power forecast. Due to the effects of the energy crisis and Russia’s invasion of Ukraine, the IEA now predicts global renewable capacity to grow by almost 75% between 2022 and 2027. 

Within this period of turbocharged growth, wind and solar – weighted roughly equally in Enlight’s project portfolio – have the most momentum. The IEA estimates that together, wind and solar will represent over 90% of added renewable capacity through 2027. 

Despite the rapid retreat of tech stocks over the year, energy has been a bright spot on the investing map. Energy stocks soared over 50% in 2022, and Wall Street analysts see the sector maintaining its winning streak this year. 

Notable recent renewable IPOs include MN8, which filed with the SEC on January 5. As U.S. solar market leader, MN8 boasts annualized net profits roughly seven times that of Enlight. 

Enlight may be smaller, but it nonetheless has great growth potential. Its popularity in Israel helped it outperform U.S. stock indices in recent years. It remains to be seen if it can replicate this level of alpha in New York, though. Renewables investors will want to keep an eye on this deal. 

This article was produced and syndicated by Wealth of Geeks.

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