Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 12 Mar, 25 | ORA | Buy | USD 71.1 | USD 75.5 | USD 80.0 | 57 days | 12.5% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Ormat 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 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.
Energy Storage Expansion – The Energy Storage segment experienced substantial growth, with revenues increasing 56.7% in Q4 2024 and 30.6% for the full year, driven by new capacity additions and improved market positioning.
Significant Growth in Adjusted EBITDA – Ormat’s adjusted EBITDA increased by 14.3% year-over-year, reaching $550.5 million in 2024, demonstrating strong profitability and operational efficiency.
Product Segment Decline in Q4 – The Product segment reported a 21.4% drop in revenue for Q4 2024, reflecting the timing of revenue recognition, which may indicate fluctuations in contract execution and delivery schedules.
Decline in Electricity Revenues in Q4 – Electricity segment revenues decreased by 2.1% in Q4 2024, primarily due to unplanned maintenance at the Dixie Valley plant and grid operator curtailments, impacting short-term revenue.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 71.1 | 65.5 | 75.5 | 80.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strategic Portfolio Expansion Fuels Growth
Ormat Technologies, Inc. (NYSE: ORA) continues to demonstrate robust financial and operational performance, driven by strategic portfolio expansion and acquisitions. In 2024, the Company achieved a 6.1% increase in total revenues, with notable growth across all three business segments. This expansion included the addition of 253 MW of new capacity, comprising 133 MW in the Electricity segment and 120 MW in Energy Storage. These developments reinforce Ormat’s trajectory toward achieving its targeted generating capacity of 2.6 to 2.8 GW by 2028.
Strong Financial Performance in 2024
Ormat’s financial results for the year ended December 31, 2024, highlight steady growth and profitability. The Company reported a 3.5% increase in operating income, reaching $172.5 million, while adjusted EBITDA grew by 14.3% to $550.5 million. Fourth-quarter net income improved by 14.3% year-over-year, and adjusted net income saw a 7.7% increase. Although Electricity segment revenues slightly declined in the fourth quarter due to maintenance-related curtailments, full-year revenues grew by 5.3%, supported by contributions from acquired Enel assets and improved plant performances.
Energy Storage and Product Segment Gains
Ormat’s Energy Storage business exhibited significant progress, with revenues increasing 56.7% in the fourth quarter and 30.6% for the full year. This growth stemmed from the commissioning of new facilities, including the Bottleneck and Montague energy storage projects, as well as a legal settlement with a battery supplier. The Product segment also posted positive results, with full-year revenues rising by 4.4% and gross margin improving from 13.4% to 18.4% due to enhanced contract execution and backlog expansion. As of February 2025, the Company’s Product segment backlog reached approximately $340 million, including a significant EPC contract for the Te Mihi Stage 2 geothermal plant in New Zealand.
Strategic Developments and Future Growth
The Company continued to secure strategic agreements, including a 10-year Power Purchase Agreement (PPA) with Calpine Energy Solutions and a tender win for two energy storage facilities in Israel with a combined capacity of 300 MW/1,200 MWh. Additionally, Ormat commenced operations at the 35 MW Ijen geothermal power plant in Indonesia, reinforcing its international expansion. The Company remains focused on capitalizing on the increasing global demand for renewable energy, particularly from hyper-scalers seeking long-term clean energy solutions.
2025 Outlook and Guidance
For 2025, Ormat anticipates total revenues between $935 million and $975 million, with Electricity segment revenues expected to range from $710 million to $725 million. The Company projects Product segment revenues between $172 million and $187 million and Energy Storage revenues between $53 million and $63 million. Adjusted EBITDA is forecasted to be between $563 million and $593 million, with an estimated $23 million attributable to minority interest. To sustain its long-term growth, Ormat has secured eligibility for Production Tax Credits (PTC) and Investment Tax Credits (ITC) for geothermal and energy storage projects through 2028 and 2026, respectively.
Dividend Declaration and Shareholder Returns
On February 26, 2025, Ormat’s Board of Directors declared a quarterly dividend of $0.12 per share, payable on March 26, 2025, to shareholders of record as of March 12, 2025. The Company also expects to maintain the same quarterly dividend throughout the next three quarters. This consistent dividend policy underscores Ormat’s commitment to delivering value to shareholders while continuing its strategic investments in renewable energy growth and innovation.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Ormat Technologies Inc (NYSE: ORA) at the closing market price of USD 71.10, as on March 11, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Utilities Industry: Utilities - Renewable
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| ORA Ormat Technologies Inc |
-1.02 1.38% | 72.85 | 41.93 | 30.49 | 5.59 | 1.95 | 8.01 | 15.28 |
| CEG Constellation Energy Corp |
-1.5 0.51% | 290.90 | 26.42 | 27.55 | 3.13 | 6.31 | 3.58 | 13.47 |
| OEZVF VERBUND AG |
- -% | 67.84 | 10.61 | 13.37 | 2.57 | 3.03 | 2.51 | 6.50 |
| OEZVY Verbund AG ADR |
-0.005 0.03% | 15.18 | 10.72 | 13.53 | 2.57 | 3.06 | 2.51 | 6.50 |
| DNNGY Orsted A/S ADR |
-0.98 6.81% | 13.41 | - | 25.91 | 0.23 | 2.02 | 0.31 | -8.6553 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 11,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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