Valued at a market cap of $5.76 billion, Ormat Technologies (NYSE: ORA) is a global leader in geothermal power and energy storage solutions.
The world is shifting toward clean energy at an unprecedented rate. Data centers require reliable power, and electric grids need stable energy sources. This creates enormous opportunities for companies that can deliver clean, round-the-clock power.
Ormat sits right at the center of this change. The company builds and operates geothermal power plants that run 24/7. It also develops energy storage systems that help balance power grids.
Ormat stock has a Ziggma score of 63, ranking it in the top half of Utilities stocks. As the company’s solutions encounter fast growing demand, we expect the ORA’s Ziggma Stock Score to improve over the coming quarters, driven by growth.
ORA stock offers investors the opportunity to profit from the clean energy boom. The company combines steady cash flows from its power plants with growth from new projects worldwide.
In the last 10 years, Ormat stock has almost tripled shareholder returns. Despite these outsized gains, the clean energy stock trades 25% below all-time highs, allowing you to buy the dip.
ORA stock delivered strong results in Q2, as revenue increased 9.9% year-over-year and net income rose 26.1%. The company also raised its profit outlook for the whole year. Let’s see if ORA stock is a good investment at this time.
Ormat Stock Profile: Clean Energy That Never Stops
Ormat operates three main business lines. Each one targets different parts of the growing clean energy market.
Electricity Segment – Ormat owns and operates geothermal power plants that generate electricity. These plants tap into underground heat sources and produce power around the clock, unlike solar or wind farms.
The company operates plants across the United States, Kenya, Guatemala, Indonesia, and other countries with a total capacity of 1,000 megawatts.
Product Segment – Ormat designs and builds power equipment for other companies. This includes complete geothermal power plants and individual components.
The product backlog stands at $263 million, representing a 59% increase from last year.
Energy Storage Segment – Ormat builds battery storage systems that help balance power grids. These systems store excess electricity when demand is low and release power when demand peaks.
This segment grew 62.7% in Q2 as strong merchant power prices on the East Coast boosted profits.
ORA Stock: Strong Financial Performance Across All Business Lines
Ormat reported solid financial results in Q2 as it performed well across business segments.
Revenue Growth Drivers: Total revenue hit $234 million, up 9.9% year-over-year. The product segment led with 57.6% growth, while energy storage revenue increased by 62.7%.
Profitability Improvements: Net income increased to $28 million, a 26.1% rise from the previous year, while adjusted EBITDA grew 6.7% to $134.6 million.
The product segment saw margins improve to 27.7% from just 13.7% last year, driven by better contract terms.
Strong Cash Generation: Ormat generates steady cash flows from long-term power contracts. For instance, its power purchase agreements span 20 to 30 years.
The company secured $300 million in new funding during the quarter, which includes $139 million from tax equity deals and $161 million in project financing.
ORA Stock: Climate Action Champion
Climate Action Leadership Ormat directly fights climate change through clean energy production.
Geothermal power produces no greenhouse gas emissions during operation, and the company’s plants prevent millions of tons of CO2 emissions each year.
Innovation in Clean Technology: The company invests heavily in Enhanced Geothermal Systems (EGS), a technology that could unlock geothermal power in many new locations.
Global Environmental Impact: Ormat operates in developing countries where access to clean energy is most crucial. Projects in Kenya and Guatemala provide reliable electricity to growing economies.
The Bull Case for Ormat Technologies Stock
Ormat benefits from multiple growth drivers that are expected to accelerate in the coming years.
Policy Tailwinds: New legislation extends tax credits through 2033, which provides eight more years of federal support for new projects.
Faster Permitting: Federal permitting reforms have reduced approval times from over a year to just two months in some cases, enabling Ormat to build projects significantly faster.
Data Center Demand: Tech companies need reliable 24/7 power for AI and cloud computing, making geothermal an ideal option for AI leaders.
Capacity Expansion: Ormat targets a total capacity of 2.6-2.8 gigawatts by 2028, an increase of almost 200% from current levels.
Enhanced Geothermal Systems: EGS technology could dramatically expand where geothermal works. Ormat leads research in this area and hired a new EGS executive.
Management maintains strong guidance for 2025, with revenue expected to grow 9% to between $955 million, while adjusted EBITDA is projected to increase 5% to $580 million.
The company expects to add 148 megawatts of new capacity by the end of 2026, which includes 28 megawatts of geothermal and 22 megawatts of solar at the Heber complex.
Cross-border opportunities continue to expand, as evidenced by Ormat’s recent acquisition of the Blue Mountain geothermal plant in Nevada. The company also secured project financing for plants in Guadeloupe and Dominica.
Conclusion: Powering the Clean Energy Future
ORA stock positions investors at the forefront of the global shift to clean energy. Geothermal power provides exactly what utilities need – reliable, emission-free electricity.
Financial forecasts show strong growth ahead. Analysts expect revenue to climb from $880 million in 2024 to $1.37 billion by 2029. That represents 9.3% annual growth.
Net income could increase from $134 million or $2.20 per share in 2024 to $313 million or $5.01 per share by 2029.
Market conditions strongly favor Ormat’s business model. Data centers are expected to drive significant growth in electricity demand as governments push for cleaner power sources.
Ormat’s unique position as a leader in geothermal energy creates competitive advantages. The company owns valuable land rights near heat sources, and its technology expertise keeps competitors at bay.
Given the company’s growth outlook and leadership in clean energy, ORA stock offers compelling value for investors seeking exposure to the energy transition while generating steady income from proven power assets.