Ormat Technologies, Inc. (NYSE: ORA)

Sector: Utilities Industry: Utilities - Renewable CIK: 0001296445
Market Cap 5.64 Bn
P/B 6.25
P/E 146.14
P/S 14.39
ROIC (Qtr) 4.07
Div Yield % 0.33
Rev 1y % (Qtr) 17.92
Total Debt (Qtr) 2.75 Bn
Debt/Equity (Qtr) 1.10
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About

ORMAT Technologies, Inc., often recognized by its ticker symbol ORA, is a prominent player in the energy industry, specifically engaged in the geothermal energy power business. The company's mission is to establish itself as a leading global provider of renewable energy, thereby contributing to the mitigation of climate change by offering alternatives to carbon-intensive energy sources. ORMAT's operations span across various business segments, including the Electricity Segment, Product Segment, and Energy Storage Segment. The Electricity Segment...

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Investment thesis

Bull case

  • Operating cash flow of 388.68M provides exceptional 121.46x coverage of minority interest expenses 3.20M, showing strong core operations.
  • Operating cash flow of 388.68M provides strong 19.65x coverage of stock compensation 19.78M, indicating sustainable incentive practices.
  • Strong operating cash flow of 388.68M provides 4.09x coverage of SG&A expenses 95.04M, showing efficient operational cost management.
  • Tangible assets of 5.64B provide exceptional 172.67x coverage of deferred revenue 32.68M, showing strong service capability backing.
  • Operating cash flow of 388.68M provides strong 11.89x coverage of deferred revenue 32.68M, indicating service delivery capability.

Bear case

  • Operating cash flow of 388.68M barely covers its investment activities of (714.94M), with a coverage ratio of -0.54, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 388.68M provides thin coverage of dividend payments of (29.09M) with a -13.36 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Investment activities of (714.94M) provide weak support for R&D spending of 6.66M, which is -107.41x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 205.74M provide limited coverage of acquisition spending of (112.30M), which is -1.83x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 173.19M relative to inventory of 44.60M (3.88 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Segments Breakdown of Revenue (2024)

Accounting Standards Update Breakdown of Revenue (2024)

Peer comparison

Companies in the Utilities - Renewable
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CEG Constellation Energy Corp 98.92 Bn 153.61 4.71 9.04 Bn
2 ENLT Enlight Renewable Energy Ltd. 9.32 Bn 66.03 14.79 5.54 Bn
3 BEP Brookfield Renewable Partners L.P. 9.20 Bn -37.24 1.46 39.66 Bn
4 ORA Ormat Technologies, Inc. 5.64 Bn 146.14 14.39 2.75 Bn
5 CWEN Clearway Energy, Inc. 4.62 Bn 184.82 3.85 9.22 Bn
6 FLNC Fluence Energy, Inc. 2.37 Bn -45.59 0.93 0.39 Bn
7 RNW ReNew Energy Global plc 1.93 Bn 14.53 1.21 9.22 Bn
8 XIFR XPLR Infrastructure, LP 1.00 Bn -35.67 0.84 6.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.03 0.82
EV to Cash from Ops. EV/CFO 54.68 3.77
EV to Debt EV to Debt 2.27 -7.57
EV to EBIT EV/EBIT 91.29 18.11
EV to EBITDA EV/EBITDA 57.05 5.59
EV to Free Cash Flow [EV/FCF] EV/FCF -42.31 -9.43
EV to Market Cap EV to Market Cap 1.11 -1.15
EV to Revenue EV/Rev 15.95 -22.88
Price to Book Value [P/B] P/B 6.25 2.64
Price to Earnings [P/E] P/E 146.14 1.37
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.58 -4.71
Dividend Payout Ratio % Div Payout % (Qtr) 21.70 -0.74
Dividend per Basic Share Div per Share (Qtr) 0.48 0.32
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -13.64 12.62
Interest Coverage Int. cover (Qtr) 1.76 -4.73
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -13.77 -691.81
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 16.38 37.74
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.15
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 28.17 -300.29
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 7.68 -47.88
EBIT Growth (1y) % EBIT 1y % (Qtr) 0.72 -76.46
EBT Growth (1y) % EBT 1y % (Qtr) -11.66 -85.90
EPS Growth (1y) % EPS 1y % (Qtr) 12.18 398.06
FCF Growth (1y) % FCF 1y % (Qtr) -54.79 1,637.76
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.64 93.44
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.15 0.35
Cash Payout Ratio Cash Payout (Qtr) 0.03 0.02
Cash Ratio Cash Ratio (Qtr) 0.31 1.83
Current Ratio Curr Ratio (Qtr) 0.77 2.29
Debt to Equity Ratio Debt/Equity (Qtr) 1.10 0.89
Interest Cover Ratio Int Coverage (Qtr) 1.76 -4.73
Times Interest Earned Times Interest Earned (Qtr) 1.76 -4.73
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 56.60 -241.05
EBIT Margin % EBIT Margin % (Qtr) 26.41 -107.41
EBT Margin % EBT Margin % (Qtr) 11.44 -407.45
Gross Margin % Gross Margin % (Qtr) 28.30 9.67
Net Profit Margin % Net Margin % (Qtr) 14.10 -408.25