Ormat Techno (ORA) AI Stock Analysis

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Ormat Techno

(NYSE:ORA)

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Neutral 56 (OpenAI - 5.2)

Rating:56Neutral

Price Target:

$110.00

▼(-0.05% Downside)

Action:DowngradedDate:02/27/26

The score is led by improving fundamentals (notably lower balance-sheet leverage) but held back by persistent negative free cash flow. Technicals are weak with the stock below key moving averages and negative MACD, and valuation looks demanding given the high P/E and low yield. Earnings-call guidance and contract wins provide a constructive growth outlook, though margin pressure, high CapEx, and leverage remain key risks.

Positive Factors

Long-term PPAs strengthen contracted revenue

Multi‑year PPAs with large counterparts (Google, Switch) create durable, predictable cashflows and support high-capacity project development. These contracts underwrite future plant builds, reduce merchant exposure and improve long-term revenue visibility across Ormat's geothermal pipeline.

Rapid growth and high margins in new segments

Energy Storage's strong top-line growth and high gross margins demonstrate successful portfolio diversification beyond pure geothermal. Continued scale in storage and improved Product profitability can sustainably lift group margins and reduce reliance on volatile electricity merchant pricing.

Material reduction in balance-sheet leverage

A markedly lower debt-to-equity ratio significantly increases financial flexibility and reduces solvency risk. With equity expansion and a stronger capital base, Ormat can better fund growth projects, pursue M&A or weather execution delays without forcing distressed asset sales.

Negative Factors

Consistent negative free cash flow

Persistent negative FCF signals heavy reinvestment and high CapEx needs that current operating cash flow doesn't fully cover. Over time this elevates funding risk, increases reliance on external financing or asset monetization, and could constrain returns if project IRRs lag expectations.

Elevated net leverage relative to EBITDA

Net debt/EBITDA near 4.4x constrains financial flexibility and raises refinancing and covenant risk, especially given volatile project timelines and negative FCF. Higher leverage increases interest burden and limits capacity to accelerate organic growth or absorb project overruns without equity issuance.

Electricity segment margin pressure and curtailments

Curtailments and lower electricity rates compress core geothermal margins, reducing the durable cashflow strength of baseload assets. A sustained mix shift toward lower-margin Product revenue amplifies margin risk, making earnings and free cash generation more sensitive to commodity and operational disruptions.

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

Market Cap

$6.70B

Dividend Yield0.42%

Average Volume (3M)741.04K

Price to Earnings (P/E)54.1

Beta (1Y)0.42

Revenue Growth6.07%

EPS Growth12.07%

CountryUS

Employees1,512

SectorUtilities

Sector Strength65

IndustryRenewable Utilities

Share Statistics

EPS (TTM)0.67

Shares Outstanding60,845,410

10 Day Avg. Volume876,194

30 Day Avg. Volume741,036

Financial Highlights & Ratios

PEG Ratio-110.96

Price to Book (P/B)2.64

Price to Sales (P/S)6.78

P/FCF Ratio-23.56

Enterprise Value/Market Cap1.38

Enterprise Value/Revenue9.37

Enterprise Value/Gross Profit34.01

Enterprise Value/Ebitda17.04

Forecast

1Y Price Target

$134.55

Price Target Upside22.25% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering11

EPS Forecast (FY)2.3

Revenue Forecast (FY)$1.14B

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 Technologies generates revenue primarily through the sale of electricity produced by its geothermal power plants, which are either owned and operated by the company or developed under power purchase agreements (PPAs) with utility companies. Additionally, the company earns revenue from the sale of its proprietary energy conversion technology and equipment for geothermal and recovered energy generation projects. Key revenue streams include long-term contracts with utilities, maintenance and operation services for third-party plants, and royalties from licensing its technology. Significant partnerships with government entities and private utilities enhance its market reach and revenue stability, particularly in regions focusing on renewable energy initiatives.

Ormat Techno Key Performance Indicators (KPIs)

Any

Operating Income by Segment

Operating Income by Segment
Measures the profit generated from core operations in each segment, reflecting operational efficiency and strategic focus.

Chart InsightsOrmat Technologies' product and energy storage segments are showing strong recovery, with significant growth in operating income, reflecting strategic focus and market demand. The product segment's resurgence is notable, aligning with a 57.6% revenue increase. Meanwhile, energy storage's operating income turnaround supports its 62.7% revenue growth. However, the electricity segment faces challenges, with a decline due to maintenance and energy curtailment, impacting its gross margin. Despite these issues, Ormat's strategic funding and expansion initiatives highlight its commitment to long-term growth and resilience in a competitive market.

Data provided by:

The Fly

Ormat Techno Earnings Call Summary

Earnings Call Date:Feb 25, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:May 13, 2026

Earnings Call Sentiment Positive

The call highlighted solid top-line growth, strong outperformance in Energy Storage and Product segments, significant commercial wins (notably large PPAs with Google and Switch), strategic M&A and progress on EGS partnerships. However, margin pressure in the Electricity segment driven by curtailments, a Q4 net income hit from impairments, and elevated leverage are notable concerns. Management provided constructive 2026 guidance and reiterated long-term capacity targets, while flagging some one-time items and continued execution risk on EGS commercialization.

Q4-2025 Updates

Positive Updates

Revenue Growth

Total revenues for 2025 increased 12.5% year-over-year to $989.6 million; fourth quarter revenue was $276 million, up 19.6% versus prior year.

Adjusted EBITDA and Adjusted Net Income Improvement

Full year adjusted EBITDA rose 5.7% to $582 million; fourth quarter adjusted EBITDA was $158.7 million, up 9.1% year-over-year. Full year adjusted net income was $137.3 million ($2.24 per diluted share), up from $133.7 million ($2.20).

Energy Storage Segment Outperformance

Energy Storage revenue grew 109.3% for the full year to $79 million and 140.5% in the fourth quarter, driven by elevated PJM prices and higher availability; segment gross margin was 51.5% in Q4 and 36.4% for the full year.

Product Segment Expansion

Product segment revenue increased 55.2% for the full year to $216.7 million and 59.1% in Q4, with full-year gross margin improving by ~280 basis points to 21.2%, driven by backlog conversion and better project profitability.

Large New PPAs and Contract Wins

Secured ~200 MW of new PPAs including a 15-year portfolio PPA for up to 150 MW supporting Google's Nevada data center (via NV Energy) and a 20-year PPA with Switch for ~13 MW from Salt Wells; two blend-and-extend agreements (~40 MW) pending approval — enhancing long-term revenue visibility and validating development/ exploration investments.

Strategic M&A and Project Commissioning

Commissioned Arrowleaf (first solar + battery in California), acquired Hoku (30 MW solar + 30 MW / 120 MWh BESS in Hawaii with a 25-year PPA) for $80.5 million, and continued positive contribution from Blue Mountain acquisition; added 72 MW in Q4, bringing portfolio to ~1,340 MW globally.

Progress on EGS and Strategic Partnerships

Advanced EGS commercialization via co-leading Sage Geosystems Series B financing, commercial agreement with Sage, and partnership with SLB; two pilots planned using Ormat facilities and potential future equipment/EPC opportunities.

Strong Liquidity and Tax Monetization

Collected over $180 million in cash monetization of PTCs/ITCs in 2025 (vs. $160M anticipated); cash and restricted cash increased to ~$281 million (from ~$206M); total available liquidity ~$680 million; recorded tax benefits that produced a negative tax rate (-20% in Q4) and expect negative 15%-20% in 2026.

2026 Guidance and Growth Targets

2026 revenue guidance of $1,110M–$1,160M (midpoint +14.6% YoY) and adjusted EBITDA guidance of $615M–$645M (midpoint +~8.2%); reaffirmed portfolio capacity target of 2.6–2.8 GW by end of 2028 and detailed CapEx plan (~$675M gross, net ~$575M after Topp2 sale).

Shareholder Returns

Board declared a quarterly dividend of $0.12 per share payable March 24, 2026, and expects to pay $0.12 per share in each of the next three quarters.

Negative Updates

Electricity Segment Margin Pressure

Overall gross margin declined to 27.6% for the full year (31.0% prior year) and 28.6% in Q4 (31.9% prior year), driven primarily by curtailments in the Electricity segment and a revenue mix shift toward lower-margin Product revenues.

Curtailments and Reduced Electricity Revenue

Electricity segment revenue decreased 1.2% year-over-year to $693.9 million for 2025, with curtailments reducing segment revenue by $18.6 million and temporary generation reductions at Puna and repowering at Stillwater contributing to the decline; company expects residual curtailment in 2026 of roughly $4 million–$6 million.

Net Income Impacted by Impairments

Fourth quarter GAAP net income attributable to stockholders fell to $31.4 million ($0.50 per diluted share) from $40.8 million ($0.67) a year earlier, primarily due to impairment charges related to Brawley geothermal assets and one Ormat facility expected to be discontinued in 2026.

Leverage and Debt Levels

Total debt was approximately $2.8 billion (cost of debt 4.8%); net debt roughly $2.5 billion, implying net debt/EBITDA of 4.4x — a relatively elevated leverage level that could constrain flexibility.

One-Time Backlog and Revenue Timing Effects

Product backlog growth (+19% sequential) was bolstered by the Topp 2 project which was sold to the customer, generating ~ $100 million of product revenue expected in Q1 2026 (approximate 20% gross margin) — a one-time boost that may complicate year-over-year comparability.

Puna and Regional Price Uncertainty

Lower energy rates at Puna negatively impacted results in 2025; management noted Puna prices are slightly lower entering 2026 and geopolitical tension (e.g., Middle East) could change pricing dynamics, introducing near-term rate uncertainty.

Execution and Commercialization Risks for EGS

EGS progress is encouraging but remains early-stage with technological and execution risks (water-loss, economics). Revenues or material EPC/product sales tied to EGS likely remain contingent on successful pilots and are pushed into 2027–2028 or later, per management commentary.

Company Guidance

Ormat guided 2026 revenue of $1,110M–$1,160M (≈14.6% YoY increase at the midpoint) with segment guidance of Electricity $715M–$730M, Product $300M–$320M and Energy Storage $95M–$110M, and adjusted EBITDA $615M–$645M (≈8.2% increase at the midpoint); management expects CapEx of $675M (net investment ≈$575M after the ~$100M Topp‑2 sale) with ~$465M for Electricity, ~$180M for Storage and ~$10M for the EGS pilot with SLB, and Q1 to benefit from ~ $100M of Product revenue (≈20% gross margin) from Topp‑2; tax/incentive outlook includes ~ $90M of ITC/PTC proceeds in 2026 and an expected negative tax rate of ~‑15% to ‑20% driven by new storage CODs, cash and liquidity were ~$281M and total available liquidity ~$680M at year‑end, total debt ≈$2.8B (cost of debt 4.8%) with net debt ≈$2.5B (≈4.4x net debt/EBITDA), expected curtailment ≈$4M–$5M (Q4 2025 curtailment subsided), and a quarterly dividend of $0.12/share declared (paid March 24, 2026 and planned for the next three quarters).

Ormat Techno Financial Statement Overview

Summary

Steady revenue growth and positive net margins support the core business, and leverage improved meaningfully on the balance sheet. The main drag is cash-flow quality: free cash flow is negative every year and worsened in 2025, increasing funding/execution risk despite positive operating cash flow.

Income Statement

Positive

Revenue has generally trended upward from 2022–2025 (2025 up ~4.8% vs. 2024; 2024 essentially flat vs. 2023), showing steady top-line momentum. Profitability is positive with net margins in the low-to-mid teens in 2023–2025, but gross margin has compressed versus 2020–2022 levels. A key weakness is inconsistency in operating profitability signals—2025 shows negative EBITDA margin despite solid net income, which raises questions about earnings quality/one-offs or cost structure volatility.

Balance Sheet

Positive

Leverage improved dramatically in 2025: debt-to-equity fell to ~0.14 from ~0.91–1.10 in 2021–2024, indicating a much stronger balance sheet and lower financial risk. Equity also expanded meaningfully by 2025, supporting asset growth. The main offset is that returns on equity are modest and declined in 2025 versus 2023–2024, suggesting profitability isn’t yet scaling as quickly as the capital base.

Cash Flow

Neutral

Operating cash flow is consistently positive (roughly $259M–$411M across 2020–2025), which supports the underlying business durability. However, free cash flow is negative every year shown and worsened materially in 2025 (about -$285M), indicating heavy reinvestment and/or elevated capital spending. Cash generation also doesn’t consistently translate into stronger free cash flow, creating a funding and execution risk if investment returns lag.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	989.54M	879.65M	829.42M	734.16M	663.08M
Gross Profit	272.69M	272.62M	264.02M	268.82M	264.34M
EBITDA	536.06M	512.27M	462.76M	382.14M	369.18M
Net Income	123.90M	123.73M	124.40M	65.84M	62.09M
Balance Sheet
Total Assets	6.25B	5.67B	5.21B	4.61B	4.43B
Cash, Cash Equivalents and Short-Term Investments	280.87M	94.39M	195.81M	95.87M	282.62M
Total Debt	2.86B	2.45B	2.12B	2.05B	1.93B
Total Liabilities	3.56B	3.11B	2.76B	2.58B	2.42B
Stockholders Equity	2.54B	2.43B	2.32B	1.87B	1.85B
Cash Flow
Free Cash Flow	-284.68M	-76.76M	-308.98M	-282.50M	-160.45M
Operating Cash Flow	335.10M	410.92M	309.40M	280.97M	258.82M
Investing Cash Flow	-726.43M	-780.25M	-628.34M	-523.41M	-638.19M
Financing Cash Flow	465.75M	287.92M	379.96M	126.27M	186.38M

Ormat Techno Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price110.06

Price Trends

50DMA

117.36

Negative

100DMA

113.75

Negative

200DMA

101.44

Positive

Market Momentum

MACD

-2.94

Positive

RSI

43.93

Neutral

STOCH

70.36

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 110.06 is below the 20-day moving average (MA) of 112.64, below the 50-day MA of 117.36, and above the 200-day MA of 101.44, indicating a neutral trend. The MACD of -2.94 indicates Positive momentum. The RSI at 43.93 is Neutral, neither overbought nor oversold. The STOCH value of 70.36 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 (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWEN.A	69 Neutral	$7.79B	23.42	5.91%	5.60%	2.54%	124.89%
EE	67 Neutral	$3.88B	21.38	12.18%	0.99%	45.09%	50.54%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWEN	61 Neutral	$7.79B	23.42	5.91%	5.29%	2.54%	124.89%
ORA	56 Neutral	$6.70B	54.13	4.95%	0.42%	6.07%	12.07%
BEPC	55 Neutral	$7.33B	-2.94	-38.17%	3.84%	5.93%	-39.88%
RNW	55 Neutral	$1.88B	-231.49	10.05%	―	42.09%	219.69%

* Utilities Sector Average

Performance Comparison

ORA

Ormat Techno

110.06

38.94

54.74%

CWEN

Clearway Energy

38.02

10.37

37.52%

CWEN.A

Clearway Energy

37.79

11.78

45.28%

BEPC

Brookfield Renewable

40.64

13.48

49.63%

RNW

ReNew Energy Global

5.17

-0.96

-15.66%

Excelerate Energy, Inc. Class A

34.05

6.02

21.47%

Ormat Techno Corporate Events

Business Operations and Strategy

Ormat Technologies Signs Long-Term Geothermal PPA for Google

Positive

Feb 17, 2026

On February 17, 2026, Ormat Technologies announced it had signed a long-term geothermal power purchase agreement with NV Energy to supply up to 150 MW of new geothermal capacity to support Google’s Nevada data center operations. Enabled by NV Energy’s Clean Transition Tariff and pending approval by Nevada regulators expected in the second half of 2026, the multi-project portfolio is designed to bring new geothermal plants online between 2028 and 2030.

Under the portfolio structure, projects will be added as they reach commercial operation, with the contract running from the first project’s start date to 15 years beyond the final project’s commissioning, providing long-term revenue visibility for Ormat and predictable clean power for Google. The deal underscores geothermal’s role as reliable, carbon-free baseload power amid AI-driven demand growth and highlights a scalable tariff model that can be replicated in other U.S. markets, reinforcing Ormat’s growth strategy and Nevada’s clean-energy leadership while insulating other ratepayers from additional costs.

The most recent analyst rating on (ORA) stock is a Hold with a $130.00 price target. To see the full list of analyst forecasts on Ormat Techno stock, see the ORA Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Feb 27, 2026