Ormat Technologies
ORA
$108.38
+0.07%
Ormat Technologies, Inc. is a leading renewable energy company specializing in geothermal power, recovered energy generation, and energy storage, operating primarily in the United States and international markets. As a vertically integrated player, it develops, builds, owns, and operates power plants while also manufacturing and selling equipment for geothermal and recovered energy systems, positioning itself as a niche leader in the geothermal segment. The current investor narrative centers on the company's strategic expansion into energy storage and its ability to secure long-term power purchase agreements, such as the recent 15-year geothermal PPA with NV Energy to power Google data centers, which underscores its growth potential in the clean energy transition. However, the stock has faced recent volatility due to broader market sell-offs and concerns about capital-intensive growth, making its execution and cash flow generation key focal points for investors.…
ORA
Ormat Technologies
$108.38
Related headlines
Investment Opinion: Should I buy ORA Today?
Based on the analysis, I rate Ormat as a Hold. The consensus analyst rating is 'Buy' with an average target of $132.83, implying a 22.6% upside, but the high valuation and declining profitability temper enthusiasm. The thesis is that Ormat's growth potential is real, but the current price already reflects much of the optimism.
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ORA 12-Month Price Forecast
The AI assessment is neutral, reflecting a balance between strong revenue growth and concerning profitability trends. The high valuation and negative cash flow limit upside, but the strategic PPA with Google and expansion into storage provide long-term potential. The stance would upgrade to bullish if margins stabilize and free cash flow turns positive, or downgrade to bearish if revenue growth decelerates below 10% or margins continue to decline.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Ormat Technologies's 12-month outlook, with a consensus price target around $132.83 and implied upside of +22.6% versus the current price.
Average Target
$132.83
0 analysts
Implied Upside
+22.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$112 - $157
Analyst target range
Ormat is covered by 12 analysts, with a consensus recommendation of 'Buy' and a mean rating of 2.08 (where 1 is Strong Buy and 5 is Sell). The average price target is $132.83, implying an upside of approximately 22.6% from the current price of $108.38. The target range is wide, from a low of $112.00 to a high of $157.00, indicating significant uncertainty about the company's future performance. Recent ratings actions have been mixed, with Jefferies downgrading from Buy to Hold in February 2026, while TD Cowen upgraded from Hold to Buy in January 2026, and Barclays and UBS have maintained Overweight/Buy ratings, suggesting a generally positive but cautious sentiment.
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Bulls vs Bears: ORA Investment Factors
Ormat presents a mixed picture: strong revenue growth and strategic wins like the Google PPA are offset by declining margins, negative free cash flow, and a high valuation. The bull case hinges on continued revenue acceleration and successful execution of its growth pipeline, while the bear case focuses on margin compression and the risk of overvaluation. Currently, the bearish evidence is slightly stronger due to deteriorating profitability and cash flow, but the long-term growth story remains intact. The key tension is whether Ormat can convert its revenue growth into sustainable profitability and positive cash flow, which would justify its premium valuation.
Bullish
- Strong Revenue Growth: Q4 2025 revenue surged 19.63% YoY to $276.04M, with sequential acceleration from Q3's $249.73M. This growth is driven by new geothermal and solar PV plants, indicating robust demand for renewable energy.
- Strategic PPA with Google: Ormat signed a 15-year geothermal PPA with NV Energy to power Google data centers, providing long-term revenue visibility and validating its growth strategy. This contract enhances earnings stability and supports future expansion.
- Analyst Consensus Buy: With 12 analysts, the consensus rating is 'Buy' (mean 2.08), and the average price target is $132.83, implying a 22.6% upside from the current price of $108.38. This reflects positive sentiment and growth expectations.
- Positive EBITDA Margin: Q4 2025 EBITDA margin was 49.18%, up from 55.22% in Q3 but still strong, indicating solid operational efficiency despite rising costs. This supports the company's ability to generate cash flow for growth investments.
Bearish
- Declining Profitability: Net margin fell to 11.36% in Q4 2025 from 17.57% in Q1 2025, and gross margin dropped to 28.56% from 31.74% over the same period. Rising operating expenses and interest costs are compressing margins, which could pressure earnings.
- High Valuation Premium: Trailing PE is 54.15x and forward PE is 40.87x, significantly above the utilities sector average of ~20x. This premium pricing leaves little room for error, and any earnings miss could trigger a sharp de-rating.
- Negative Free Cash Flow: TTM free cash flow is -$284.68M, indicating heavy capital expenditure for growth. This cash burn raises concerns about the sustainability of dividends and the need for external financing, which could dilute shareholders.
- High Debt Levels: Debt-to-equity ratio is 1.12, and interest expense in Q4 2025 was $35.02M, up from $34.47M in Q1. High leverage increases financial risk, especially if interest rates remain elevated or cash flows underperform.
ORA Technical Analysis
Ormat's stock has exhibited a volatile, range-bound pattern over the past year, with a 1-year price change of +17.04%, but the current price of $108.38 sits at approximately 74% of its 52-week range (low of $89.08, high of $146.39). This positioning suggests the stock is well off its highs, reflecting a significant pullback from its peak, yet still above its lows, indicating a potential value opportunity if the downtrend reverses. The 6-month price change of -6.50% and 3-month change of -18.79% highlight a clear downward trajectory from the May 2026 peak, with the stock now trading below its 200-day moving average, signaling a bearish intermediate-term trend.
Beta
0.90
0.90x market volatility
Max Drawdown
-35.0%
Largest decline past year
52-Week Range
$89-$146
Price range past year
Annual Return
+17.0%
Cumulative gain past year
| Period | ORA Return | S&P 500 |
|---|---|---|
| 1m | +4.5% | +3.6% |
| 3m | -18.8% | +2.7% |
| 6m | -6.5% | +11.4% |
| 1y | +17.0% | +18.7% |
| ytd | -4.7% | +12.3% |
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ORA Fundamental Analysis
Ormat's revenue has shown strong growth, with the most recent quarter (Q4 2025) reporting revenue of $276.04 million, a 19.63% year-over-year increase, and a sequential acceleration from Q3 2025's $249.73 million. This growth is driven by the Electricity segment, which generated $186.64 million in revenue, benefiting from new geothermal and solar PV plants coming online. However, the company's profitability is under pressure, with a net income of $31.35 million in Q4 2025, representing a net margin of 11.36%, down from 17.57% in Q1 2025, as operating expenses and interest costs have risen. Gross margin has also declined to 28.56% in Q4 2025 from 31.74% in Q1 2025, reflecting higher costs and a changing revenue mix, though the company remains profitable with a trailing EPS of $0.52.
Quarterly Revenue
$276036000.0B
2025-12
Revenue YoY Growth
+19.6%
YoY Comparison
Gross Margin
28.6%
Latest Quarter
Free Cash Flow
$-284675000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is ORA Overvalued?
Given that Ormat has positive net income, the PE ratio is the primary valuation metric. The trailing PE is 54.15x, while the forward PE is 40.87x, indicating that the market expects earnings growth, but the gap is modest, suggesting limited near-term expansion. This valuation is at a significant premium to the broader utilities sector, which typically trades at around 20x earnings, and Ormat's PS ratio of 6.78x is also elevated, reflecting its growth-oriented profile. Historically, Ormat's PE has ranged from 25x to 97x over the past five years, and the current 54x is near the middle of that range, suggesting the stock is not at extreme valuation levels but still priced for continued growth.
PE
54.2x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 25x~98x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant: Ormat's negative free cash flow of -$284.68M TTM indicates heavy capital spending, which may require additional debt or equity financing. The debt-to-equity ratio of 1.12 and rising interest expenses (Q4 2025: $35.02M) increase financial leverage, making the company sensitive to interest rate hikes. Additionally, net margin has declined from 17.57% in Q1 2025 to 11.36% in Q4 2025, reflecting cost pressures that could persist if revenue growth slows.
