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Ormat Technologies Inc (ORA)
NYSE:ORA

Ormat Techno (ORA) AI Stock Analysis

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Ormat Techno

(NYSE:ORA)

Rating:69Neutral
Price Target:
Ormat Technologies demonstrates strong financial performance with notable revenue and profit growth, although high capital expenditures and a leveraged balance sheet are concerns. Technical indicators show positive momentum, while valuation metrics suggest the stock may be overvalued. The earnings call highlights growth in certain segments but also notes challenges such as revenue decline in the electricity segment and tariff impacts.
Positive Factors
Financial Performance
ORA delivered solid results with sequential growth in revenue and EBITDA, supported by strong storage and product performance.
Growth Potential
The Blue Mountain acquisition and Ijen project support growth targets, with plans to expand geothermal and solar capacities.
Market Opportunities
Management has indicated a positive shift in negotiations with hyperscalers, which could further improve prospects.
Negative Factors
Regulatory Risks
Broader regulatory environment, particularly changes in the IRA under the current administration, could affect long-term project viability and growth.
Revenue Challenges
Curtailments in California and Nevada led to a decline in electricity revenue and margin compression.
Supply Chain Risks
The storage segment carries the most exposure to tariffs and global supply chain risks, given heavy reliance on battery imports from China.

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

Ormat Techno Business Overview & Revenue Model

Company DescriptionOrmat Techno (ORA) is a leading company specializing in geothermal and recovered energy generation. The firm operates in the renewable energy sector, providing sustainable solutions through its geothermal power plants and recovered energy generation systems. Ormat Techno offers a range of products and services that include power plant design, equipment manufacturing, and energy project management, aimed at promoting cleaner and more efficient energy production.
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 demonstrates strong revenue growth and a solid equity position, indicating financial stability. However, negative EBIT and zero cash flow activities in 2024 highlight potential operational risks that could affect long-term sustainability. These challenges need addressing to leverage the company's strong equity base effectively.
Income Statement
65
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
72
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
40
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
879.65M829.42M734.16M663.08M705.34M
Gross Profit
272.62M264.02M268.82M264.34M276.27M
EBIT
172.47M166.59M24.08M17.71M65.51M
EBITDA
521.52M468.93M387.40M364.89M397.80M
Net Income Common Stockholders
123.73M124.40M65.84M62.09M85.46M
Balance SheetCash, Cash Equivalents and Short-Term Investments
94.39M195.81M95.87M282.62M448.25M
Total Assets
5.67B5.21B4.61B4.43B3.89B
Total Debt
2.45B2.12B2.05B1.93B1.48B
Net Debt
2.36B1.83B1.96B1.70B1.04B
Total Liabilities
3.11B2.76B2.58B2.42B1.95B
Stockholders Equity
2.43B2.32B1.87B1.85B1.81B
Cash FlowFree Cash Flow
-76.76M-308.98M-282.50M-160.45M-55.73M
Operating Cash Flow
410.92M309.40M280.97M258.82M265.00M
Investing Cash Flow
-780.25M-628.34M-523.41M-638.19M-385.97M
Financing Cash Flow
287.92M379.96M126.71M187.90M503.48M

Ormat Techno Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price73.87
Price Trends
50DMA
71.62
Positive
100DMA
69.10
Positive
200DMA
72.55
Positive
Market Momentum
MACD
0.81
Positive
RSI
50.23
Neutral
STOCH
40.97
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 73.87 is above the 20-day moving average (MA) of 73.20, above the 50-day MA of 71.62, and above the 200-day MA of 72.55, indicating a neutral trend. The MACD of 0.81 indicates Positive momentum. The RSI at 50.23 is Neutral, neither overbought nor oversold. The STOCH value of 40.97 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$6.13B38.264.70%5.50%-1.34%21.62%
ORORA
69
Neutral
$4.56B36.455.21%0.65%1.95%-6.57%
68
Neutral
$6.13B36.114.70%5.82%-1.34%21.62%
RNRNW
65
Neutral
$2.49B99.282.00%-1.77%-41.65%
63
Neutral
$8.63B10.244.67%4.35%3.78%-12.74%
54
Neutral
$5.43B32.67-4.65%4.82%1.01%-110.78%
SMSMR
42
Neutral
$6.97B-32.34%62.41%-85.81%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ORA
Ormat Techno
72.76
0.14
0.19%
CWEN
Clearway Energy
30.00
4.54
17.83%
CWEN.A
Clearway Energy
28.21
4.80
20.50%
BEPC
Brookfield Renewable
29.21
-1.44
-4.70%
SMR
NuScale Power
23.87
16.54
225.65%
RNW
ReNew Energy Global
6.87
0.85
14.12%

Ormat Techno Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 2.33%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong growth in the energy storage and product segments, as well as strategic acquisitions in geothermal. However, the decline in the electricity segment's revenue and gross margin, coupled with challenges posed by tariffs on energy storage components and maintenance impacts, created a balanced sentiment.
Q1-2025 Updates
Positive Updates
Record Quarterly Adjusted EBITDA Growth
Achieved a record quarterly adjusted EBITDA growth of 6.4% compared to the first quarter of last year, driven by robust performance in storage and product segments.
Significant Energy Storage Segment Growth
Energy storage segment revenue increased by nearly 120% in the first quarter, mainly due to new facilities and strong merchant prices in the PJM market.
Geothermal Expansion and Acquisition
Signed an agreement to acquire the 20 MW Blue Mountain geothermal power plant for $88 million and plan to upgrade it with an additional 3.5 MW by 2026.
Strong Product Segment Revenue Increase
Product segment revenues increased by 27.9% to $31.8 million during the first quarter, driven by a strong backlog.
Negative Updates
Electricity Segment Revenue Decline
Electricity segment revenues for the first quarter decreased by 5.8% to $180.2 million due to curtailments in Nevada and California.
Gross Margin Decrease in Electricity Segment
Gross margin for the electricity segment decreased to 33.5% in the first quarter, down from 39% last year, due to lower revenue from curtailments.
Impact of Tariffs on Energy Storage
Energy storage segment may face headwinds due to tariffs on China affecting imports of storage equipment components.
Temporary Decrease in Puna Power Plant Output
Maintenance work on a well at the Puna power plant in Hawaii will result in a temporary decrease in electricity generation, impacting Q2 revenues and EBITDA.
Company Guidance
During Ormat Technologies' First Quarter 2025 Earnings Conference Call, CEO Doron Blachar provided guidance indicating strong growth across several financial metrics. The company reported a 2.5% increase in revenue, a 4.6% rise in net income attributable to stockholders, and a record quarterly adjusted EBITDA growth of 6.4% compared to the previous year. The storage segment showed robust performance with a significant revenue increase of nearly 120%, while the product segment revenue grew by 27.9%. However, the electricity segment experienced a 5.8% revenue decline due to curtailments in Nevada and California. Despite these challenges, Ormat remains optimistic about its storage and geothermal segments, expecting continued strong performance through 2025 and 2026. The company also announced a guidance range for 2025 total revenues between $935 million and $975 million, and adjusted EBITDA between $563 million and $593 million. Additionally, Ormat has signed an agreement to acquire the Blue Mountain geothermal power plant, with plans for capacity upgrades and solar installations, further supporting their growth strategy.

Ormat Techno Corporate Events

Executive/Board ChangesShareholder Meetings
Ormat Techno Stockholders Approve Key Proposals at Meeting
Neutral
May 8, 2025

At the 2025 Annual Meeting, Ormat Techno‘s stockholders voted on three key proposals. The election of eight directors to the board was confirmed, with each director set to serve until the 2026 annual meeting. Additionally, the compensation for named executive officers was approved on an advisory basis, and the appointment of Kesselman & Kesselman as the independent registered public accounting firm for 2025 was ratified.

Spark’s Take on ORA Stock

According to Spark, TipRanks’ AI Analyst, ORA is a Neutral.

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.

To see Spark’s full report on ORA stock, click here.

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.