Start here if you're new
what it is
Ormat builds and runs geothermal power plants, then also sells the equipment behind them.
how it gets paid
Last year Ormat Tech made $990M in revenue. Electricity was the main engine at $693M, or 70% of sales.
why it's growing
Revenue grew 12.5% last year. This is thanks to higher demand from ai data centers for reliable.
what just happened
Revenue rose 20% to $276 million, but earnings still missed because margins got hit.
At a glance
B+ balance sheet — decent shape, but not bulletproof
70/100 earnings predictability — reasonably predictable
53.3x trailing p/e — you're paying up for this one
0.6% dividend yield — cash in your pocket every quarter
4.5% return on capital — nothing to write home about
xvary composite: 50/100 — below average
What they do
Ormat builds and runs geothermal power plants, then also sells the equipment behind them.
Ormat gets paid in more than one place. Electricity was 70% of 2025 revenue, products were 22%, and energy storage was 8%, based on company business mix data. That mix matters because if one project slips, you still have other cash streams. Diversification (not relying on one line of business) → steadier revenue mix → your downside is less tied to one plant or one order.
How they make money
$990M
annual revenue · their business grew +12.5% last year
Electricity
$693M
+12.5%
Products
$218M
+12.5%
Energy storage
$79M
+12.5%
Rounding and other
$0M
flat
The products that matter
generates and sells electricity
Electricity segment
80% of annual revenue · 67% of latest-quarter sales
this is the center of gravity. In the latest quarter, gross margin fell to 30.2% from 34.9%. When two-thirds of the business gets less profitable, the rest of the income statement usually follows.
the engine
designs and supplies equipment
Product division
23% of latest-quarter sales
this is smaller, but it was not a source of rescue. Gross margin fell to 14.2% from 24.5%. When the core segment weakens and the support segment weakens too, you do not get much forgiveness from a 53.3x multiple.
margin watch
Key numbers
53.3x
trailing p/e
P/E (price-to-earnings) → how many years of current profit you're paying for → you are paying a premium multiple for a business with 4.5% return on capital.
4.5%
return on capital
Return on capital → profit generated from money invested in the business → 4.5% is low next to a 53.3x earnings multiple.
$990M
annual revenue
Revenue → total sales → Ormat is close to the $1 billion mark, and the 2029 estimate is also $1 billion, which tells you growth is expected but not explosive.
17.1%
operating margin
Operating margin → profit after running the business, before interest and taxes → decent for a power company, but recent quarterly pressure shows it is not bulletproof.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 70 / 100
- long-term debt $2.1B (25% of capital)
- net profit margin 18.2% — keeps 18 cents of every dollar in revenue
- return on equity 8% — $0.08 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ORA 3 years ago → it's now worth $12,630.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
Revenue rose 20% to $276 million, but earnings still missed because margins got hit.
Quarterly EPS came in at $0.50 versus a $0.64 estimate, a 21.88% miss. The key problem was margin pressure, with electricity gross margin falling to 30.2% from 34.9%, plus a $12 million impairment charge.
$276M
revenue
$0.50
eps
27.2%
gross margin
the number that mattered
The 30.2% electricity gross margin mattered most because that segment is 70% of revenue, so a few points of pressure hit the whole story.
-
ormat’s margins shrank in the fourth quarter.
-
sales rose 20% to $276 million, but share earnings fell 25% to $0.50.this was mainly due to the higher cost of producing electricity, specifically the cost of energy, labor, and materials.
-
to wit, the gross margin in the core electricity segment (67% of sales) fell to 30.2% from 34.9%, and the gross margin at the product division (23% of sales) declined to 14.2% from 24.5%.
-
in addition, ormat incurred an impairment charge of $12 million.
-
still, the main thing is that sales continued to rise.this is thanks to higher demand from ai data centers for reliable, carbon-free, uninterruptible power, which ormat can provide.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
the main risk is not abstract policy noise. It is very specific: the company just posted lower segment margins across the parts of the business that matter most, while the stock still trades like the recovery is already in the bag.
high
electricity margin pressure
this is the core engine, and it weakened in the latest quarter. If 67% of sales earns less on each unit, the earnings math gets tight fast.
30.2% gross margin versus 34.9% vs. prior year in the electricity segment
high
capital intensity plus debt
geothermal assets are hard to copy because they are expensive to build and maintain. That cuts both ways when return on capital is 3.5% and long-term debt sits at $2.1B.
$2.1B debt and 25% of capital tied to long-term borrowing
med
product division volatility
the product unit was 23% of sales in the quarter, and its gross margin dropped to 14.2% from 24.5%. That is too large a segment to dismiss as noise.
14.2% gross margin versus 24.5% in the latest quarter
med
valuation leaves little slack
the stock trades at 53.3x trailing earnings while the published 3–5 year midpoint target on this page is $94, or 12% below the current price. You can be right on geothermal demand and still overpay for the stock.
current price $107.15 versus midpoint target $94
67% of sales in electricity and 23% in products both saw weaker margins in the latest quarter. That is roughly 90% of the business under pressure at once. If you own the stock, that is the part to watch first.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
electricity gross margin
30.2% was the number that broke the quarter. If this does not start moving back toward 34.9%, the premium multiple gets harder to defend.
risk
product division recovery
gross margin fell to 14.2% from 24.5%. You want to know whether that was one messy quarter or a lower-profit baseline.
calendar
next earnings update
management needs to show that higher demand converts into cleaner margins, not just bigger revenue. That is the next trust test.
trend
AI data center contract wins
the demand story becomes real when it shows up in signed power demand, utilization, or both. Until then, it is still a conference-call story.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think near-term stock performance lags while the operating story tries to clean itself up.
risk profile
average
stability score 3 — this is not a panic stock, but it is not a safe-haven utility either.
chart momentum
top 5%
technical score 1 — the chart looks stronger than the operating story right now. Welcome to markets.
earnings predictability
70 / 100
predictability is decent, not pristine. A quarter with higher sales and lower EPS is exactly why that distinction matters.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 145 buyers vs. 125 sellers in 4q2025. total institutional holdings: 51.7M shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$63
$125
$107
current price
$94
target midpoint · 12% from current · 3-5yr high: $175 (+65% · 14% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive