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Ormat Technologies Inc (ORA)
NYSE:ORA
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Ormat Techno
(NYSE:ORA)
66Neutral
Positive Factors
Regulatory and Compliance
The SEC's closure of its investigation boosts compliance confidence without any enforcement action.
Valuation and Market Position
The stock is upgraded to Buy due to a valuation disconnect, implying a potential correction closer to power peers.
Negative Factors
Execution and Operational Challenges
The biggest obstacle here is execution, given ORA's track record of revising down and missing past storage expansion targets.
Regulatory and Policy 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
$4.41B
Dividend Yield0.66%
Average Volume (3M)542.57K
Price to Earnings (P/E)34.7
Beta (1Y)0.76
Revenue Growth6.06%
EPS Growth-2.21%
CountryUS
Employees1,576
SectorUtilities
Sector Strength84
IndustryRenewable Energy Producers
Share Statistics
EPS (TTM)2.04
Shares Outstanding60,500,580
10 Day Avg. Volume621,746
30 Day Avg. Volume542,569
Financial Highlights & Ratios
PEG Ratio4.55
Price to Book (P/B)N/A
Price to Sales (P/S)4.86
Price to Cash Flow (P/CF)6.70
P/FCF Ratio16.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$84.29Price Target Upside18.55% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
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 Technologies shows robust revenue growth and a solid equity position, but faces significant challenges with negative EBIT and zero cash flow activities, raising concerns about operational efficiency and cash generation capabilities.Income Statement
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.65
Positive
Balance Sheet
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.72
Positive
Cash Flow
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.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Positive
71.10
Price Trends
66.80
Positive
72.48
Negative
73.27
Negative
Market Momentum
1.35
Negative
61.64
Neutral
66.55
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ORA, the sentiment is Positive. The current price of 71.1 is above the 20-day moving average (MA) of 67.93, above the 50-day MA of 66.80, and below the 200-day MA of 73.27, indicating a neutral trend. The MACD of 1.35 indicates Negative momentum. The RSI at 61.64 is Neutral, neither overbought nor oversold. The STOCH value of 66.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ORA.
Ormat Techno Risk Analysis
Ormat Techno disclosed 49 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $37.66B | 19.78 | 8.44% | 3.13% | 4.23% | -27.02% | |
73 Outperform | $152.28B | 22.58 | 14.24% | 2.77% | 26.91% | -6.43% | |
68 Neutral | $8.06B | 82.40 | 11.30% | ― | -41.92% | -76.24% | |
66 Neutral | $4.41B | 34.71 | 5.22% | 0.66% | 6.06% | -2.21% | |
65 Neutral | $11.91B | 15.60 | 6.55% | 4.41% | 7.00% | 0.55% | |
63 Neutral | $8.53B | 4.99 | 39.65% | 5.89% | -3.14% | 564.25% | |
46 Neutral | $1.57B | ― | -73.12% | ― | -9.83% | -71.44% |
* Utilities Sector Average
Performance Comparison
ORA
Ormat Techno
71.10
5.90
9.05%
ED
Consolidated Edison
103.77
16.87
19.41%
ENPH
Enphase Energy
60.83
-60.17
-49.73%
NEE
NextEra Energy
74.03
18.45
33.20%
AES
AES
11.99
-3.24
-21.27%
RUN
Sunrun
6.93
-3.77
-35.23%
Ormat Techno Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 4.11% | 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.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.