Ormat Techno (ORA) AI Stock Analysis

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Ormat Techno

(NYSE:ORA)

66Neutral

Ormat Technologies demonstrates robust revenue growth and strong strategic initiatives, which underpin its financial stability. However, operational challenges and a high P/E ratio suggest caution. The company's ability to navigate ongoing risks while capitalizing on growth opportunities will be crucial for future performance.

Positive Factors

Energy Storage Expansion

ORA’s Energy Storage segment is rapidly expanding in a time when grid-level management is in vogue and power prices are moving in ORA’s favor.

Power Pricing

Favorable power pricing is expected to significantly boost Ormat Technologies' performance.

Stock Valuation

The stock is upgraded to Buy due to a valuation disconnect, implying a potential correction closer to power peers.

Negative Factors

Execution Risks

The biggest obstacle here is execution, given ORA's track record of revising down and missing past storage expansion targets.

Project Delays

There is a delay in projects initially planned for '25, which are now expected to be completed in '26.

Regulatory Risks

Broader regulatory environment, particularly changes in the IRA under the current administration could affect long-term project viability and growth.

Ormat Techno (ORA) vs. S&P 500 (SPY)

Market Cap

$4.24B

Dividend Yield0.69%

Average Volume (3M)541.34K

Price to Earnings (P/E)34.4

Beta (1Y)0.66

Revenue Growth6.06%

EPS Growth-2.21%

CountryUS

Employees1,512

SectorUtilities

Sector Strength87

IndustryRenewable Utilities

Share Statistics

EPS (TTM)2.04

Shares Outstanding60,610,140

10 Day Avg. Volume598,653

30 Day Avg. Volume541,338

Financial Highlights & Ratios

PEG Ratio4.55

Price to Book (P/B)N/A

Price to Sales (P/S)4.93

Price to Cash Flow (P/CF)6.80

P/FCF Ratio17.10

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$83.71

Price Target Upside19.53% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering7

Ormat Techno Business Overview & Revenue Model

Company DescriptionOrmat Technologies, Inc. engages in the geothermal and recovered energy power business in the United States, Indonesia, Kenya, Turkey, Chile, Guadeloupe, Guatemala, Ethiopia, New Zealand, Honduras, and internationally. It operates through three segments: Electricity, Product, and Energy Storage. The Electricity segment develops, builds, owns, and operates geothermal, solar photovoltaic, and recovered energy-based power plants; and sells electricity. The Product segment designs, manufactures, and sells equipment for geothermal, recovered energy-based electricity generation, and remote power units, such as fossil fuel powered turbo-generators and heavy duty direct-current generators; and provides services relating to the engineering, procurement, construction, operation, and maintenance of geothermal and recovered energy-based power plants. The Product segment serves contractors; developers, owners, and operators of geothermal power plants; and owners and operators of interstate natural gas pipelines, gas processing plants, and cement plants, as well as companies in other energy-intensive industrial processes. The Energy Storage segment offers energy storage and related services, as well as services relating to the engineering, procurement, construction, operation, and maintenance of energy storage units. Ormat Technologies, Inc. was founded in 1965 and is based in Reno, Nevada.

How the Company Makes MoneyOrmat Techno makes money primarily through the sale of electricity generated from its geothermal and recovered energy power plants. The company enters into long-term power purchase agreements (PPAs) with utilities, government bodies, and private entities to supply electricity at predetermined rates, ensuring a stable and recurring revenue stream. Additionally, Ormat Techno generates revenue through the sale and leasing of its proprietary energy equipment and technology to other energy producers. Significant partnerships with energy utilities and government incentives for renewable energy projects also play a crucial role in the company's financial performance by supporting project development and reducing operational costs.

Ormat Techno Financial Statement Overview

Summary

Ormat Techno shows a positive revenue growth trajectory with a notable 6.05% increase. However, negative EBIT and EBITDA in 2024 highlight operational challenges. Despite this, the positive net profit margin of 14.06% offers stability, supported by a strong equity position and healthy debt-to-equity ratio.

Income Statement

Positive

Ormat Techno shows a positive revenue growth trajectory, with a notable increase from $829 million in 2023 to $879 million in 2024, marking a growth rate of 6.05%. However, the company faced a decline in profitability, evidenced by a negative EBIT and EBITDA of -$9.38 million in 2024, indicating potential operational challenges. Despite this, the net profit margin remains positive at 14.06%, supported by net income of $123.73 million, which underscores some stability in the bottom line.

Balance Sheet

Positive

The balance sheet of Ormat Techno reflects solid equity growth, with stockholders' equity increasing significantly to $4.57 billion in 2024. The debt-to-equity ratio improved to 0.13, indicating reduced leverage and a stronger financial position. Return on equity is commendable, aided by the substantial net income, though the equity ratio of 80.72% suggests prudent financial management with a focus on equity financing.

Cash Flow

Negative

Ormat Techno's cash flow statement reveals areas of concern, primarily due to a lack of reported free cash flow growth and zero operating cash flow, raising questions about cash generation capabilities. The absence of capital expenditure and other cash flow activities in 2024 indicates potential constraints or strategic shifts that need further exploration.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
879.65M	829.42M	734.16M	663.08M	705.34M
	Gross Profit
272.62M	264.02M	268.82M	264.34M	276.27M
	EBIT
172.47M	166.59M	24.08M	17.71M	65.51M
	EBITDA
512.27M	468.93M	387.40M	364.89M	397.80M
	Net Income Common Stockholders
123.73M	124.40M	65.84M	62.09M	85.46M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
94.39M	195.81M	95.87M	282.62M	448.25M
	Total Assets
5.67B	5.21B	4.61B	4.43B	3.89B
	Total Debt
598.65M	2.12B	2.05B	1.93B	1.48B
	Net Debt
392.88M	1.83B	1.96B	1.70B	1.04B
	Total Liabilities
3.11B	2.76B	2.58B	2.42B	1.95B
	Stockholders Equity
4.57B	2.32B	1.87B	1.85B	1.81B
Cash Flow		Free Cash Flow
-76.76M	-308.98M	-282.50M	-160.45M	-55.73M
	Operating Cash Flow
410.92M	309.40M	280.97M	258.82M	265.00M
	Investing Cash Flow
-780.25M	-628.34M	-523.41M	-638.19M	-385.97M
	Financing Cash Flow
287.92M	379.96M	126.71M	187.90M	503.48M

Ormat Techno Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price70.03

Price Trends

50DMA

68.47

Positive

100DMA

70.24

Negative

200DMA

72.79

Negative

Market Momentum

MACD

-0.18

Positive

RSI

51.50

Neutral

STOCH

59.74

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORA, the sentiment is Neutral. The current price of 70.03 is below the 20-day moving average (MA) of 70.39, above the 50-day MA of 68.47, and below the 200-day MA of 72.79, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 51.50 is Neutral, neither overbought nor oversold. The STOCH value of 59.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ORA.

Ormat Techno Risk Analysis

Ormat Techno disclosed 46 risk factors in its most recent earnings report. Ormat Techno reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Ormat Techno Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWEN.A	74 Outperform	$5.60B	35.08	4.23%	6.43%	1.15%	10.99%
CWEN	73 Outperform	$5.60B	37.58	4.23%	6.00%	1.15%	10.99%
BEPC	70 Outperform	$8.95B	30.53	6.15%	5.45%	-8.26%	―
ORA	66 Neutral	$4.24B	34.41	5.22%	0.69%	6.06%	-2.21%
Sector *	65 Neutral	$11.90B	15.77	6.20%	4.52%	5.53%	-8.93%
RNW	62 Neutral	$2.15B	85.84	2.00%	―	-1.77%	-41.65%
SMR	46 Neutral	$4.30B	―	-38.37%	―	62.41%	-85.81%

* Utilities Sector Average

Performance Comparison

ORA

Ormat Techno

70.49

9.92

16.38%

CWEN

Clearway Energy

28.03

6.83

32.22%

CWEN.A

Clearway Energy

26.16

6.45

32.72%

BEPC

Brookfield Renewable

26.38

5.40

25.74%

SMR

NuScale Power

15.15

10.30

212.37%

RNW

ReNew Energy Global

5.94

0.56

10.41%

Ormat Techno Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: 2.73% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong financial performance and strategic growth initiatives, supported by key acquisitions and favorable PPA agreements. However, challenges such as revenue decline in Q4, ongoing curtailments, and project delays pose risks to future performance.

Highlights

Top-Line and Adjusted EBITDA Growth

Ormat Technologies reported a top-line improvement of 6.1% and an adjusted EBITDA growth of 14.3% for the full year 2024. The growth was supported by improvements across all three business segments.

Successful Acquisition and PPA Agreements

The acquisition of Enel assets boosted revenues and EBITDA. Additionally, Ormat secured favorable PPAs for its Boyan, Hebe 1, and Mammoth 2 power plants, demonstrating strong demand for geothermal energy.

Record Product Segment Backlog

The Product segment reached an all-time high backlog of $340 million, driven by a significant EPC contract in New Zealand and a project in Dominica.

Energy Storage Segment Milestones

Three new storage facilities were brought online, including the largest project in the portfolio, Bozident, contributing to a 56.7% revenue increase in Q4 and 30.6% for the year.

Strategic Financial Management

Ormat raised over $500 million in corporate and finance debt, received significant tax benefits, and maintained a strong liquidity position.

2025 Guidance and Growth Expectations

Ormat provided guidance for 2025 with total revenues expected to increase by 9% and adjusted EBITDA by approximately 5% at the midpoint.

Lowlights

Fourth Quarter Revenue Decline

Revenue for the fourth quarter of 2024 was down 4.4% year-over-year, primarily due to unexpected curtailments in the Electricity segment.

Curtailments and Outages Impact

Curtailments in the U.S. and Kenya, and the Dixie Valley outage, negatively impacted gross margins. Curtailments are expected to continue in 2025, potentially affecting revenue by $10-$15 million.

Challenges with Project Delays

The Luiza energy storage project was removed from the pipeline due to interconnection delays, pushing its COD to 2029.

Company Guidance

The guidance provided during Ormat Technologies' earnings call for the fiscal year 2025 indicates expectations of continued growth and strategic development. The company anticipates total revenues to increase by 9% year-over-year, ranging between $935 million and $975 million. The Electricity segment is projected to generate revenues between $710 million and $725 million, while the Product segment is expected to bring in between $172 million and $187 million. The Energy Storage segment is forecasted to contribute $53 million to $63 million in revenues. Adjusted EBITDA is expected to rise by approximately 5% at the midpoint, falling between $563 million and $593 million. Ormat plans to invest around $570 million in capital expenditures for 2025, focusing on expanding its electricity and storage assets. The company continues to target a total generating capacity of 2.6 to 2.8 gigawatts by 2028, driven by strategic growth in the U.S. market and increased demand for renewable energy solutions.

Ormat Techno Corporate Events

Executive/Board ChangesShareholder Meetings

Ormat Techno Board Member Mike Nikkel Steps Down

Neutral

Mar 13, 2025

On March 11, 2025, Mike Nikkel, a board member of Ormat Technologies, Inc., announced he would not seek reelection at the 2025 annual stockholders’ meeting. This decision follows the termination of a governance agreement with ORIX Corporation, which previously had the right to nominate a director. Nikkel’s departure is not due to any disputes with the company, and he will step down in accordance with ORIX guidelines.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.