ORA Long

The Big Idea

Ormat Technologies isn’t your average utility – it’s a roller-coaster ride of clean energy hiding in plain sight. Over the past year ORA has nearly doubled investors’ money as geothermal and renewable energy megatrends have caught fire. The stock has punched through major moving averages (20/50/200-day) and raced into the 122–126 support zone only after a long run. In other words, ORA is in a textbook uptrend, taking a shallow breather near its all-time highs. This is exactly the kind of controlled pullback true bulls crave. We see it as a golden opportunity: buy the dip at these levels and ride the rebound to new highs.

Why is Ormat so exciting? Unlike run-of-the-mill power companies, Ormat is vertically integrated in geothermal and recovered energy – it designs, builds, owns and operates its plants all over the globe. The company even manufactures and sells power equipment, multiplies cash flows, and now boasts a massive 1.6 GW global portfolio (1,268 MW geothermal/solar plus 350 MW of storage). In a word, Ormat is a one-stop shop for clean base power. Couple that with booming demand for carbon-free energy and an under-the-radar valuation, and ORA suddenly looks like a runaway train set to leave the station.

What’s Changed – Why Now

Politicoadrenaline and earnings momentum have turbocharged ORA’s story. New government energy policies are explicitly backing geothermal and storage, effectively underwriting Ormat’s future growth. For example, analysts at Jefferies note that the latest Senate energy bill drafts extend big credits to geothermal and battery projects – “favorable treatment for both geothermal energy and storage technologies.” In plain English, lawmakers are effectively driving Ormat’s sales through subsidies and mandates. That’s the kind of tailwind renewable bulls salivate over.

Meanwhile, Ormat just keeps delivering. It announced a 10-year PPA with Calpine starting 2027 for its Mammoth 2 plant, replacing an expiring contract. Calpine will purchase up to 15 MW of geothermal power – at a higher price than before. Management highlights that this new deal boosts capacity and yields, underscoring a “tight supply-demand balance” in clean energy. Put simply: Ormat is winning contracts at premium rates, not discounts.

This combo of policy tailwind + contract wins has flipped sentiment. ORA ripped nearly 40% higher in the past 6 months, and is only a few points off its 52-week high. Now that it’s pulled back to the 122–126 zone, the trend is still firmly intact. Technically, ORA checks all the boxes – price above major moving averages, RSI still bullish, volume holding steady – signaling the uptrend should resume.

Catalysts Ahead

• Climate Legislation – Renewables are a priority: expect final passage of energy bills that pump funding into geothermal and storage. Good regulations mean cheap financing and big tax credits for projects Ormat is ready to build.
• Project Pipeline – Ormat’s backlog is huge. Last year it announced a ∼$270M acquisition of geothermal/solar assets, plus an EPC deal to build a 101 MW geothermal plant in New Zealand. Upcoming developments in Indochina and Latin America could add more hundreds of MW. Each new PPA or plant financing will be a catalyst for the stock.
• Earnings Season – Analysts expect another solid quarter when Ormat reports. Even conservative estimates show rising revenue and EBITDA as old PPAs roll off expensive contracts and new ones start at higher rates. The last report saw revenue climb ~10% year-over-year; at least a similar beat (or better) seems baked in for Q4.
• Innovative Tech Deals – Beyond its core, Ormat is investing in next-gen geothermal. It signed an agreement with Sage Geosystems to pilot advanced “pressure” geothermal tech (vapor-dominant reservoirs). If successful, Ormat could unlock far more energy from existing fields, multiplying returns with minimal new drilling.
• Stock Market Momentum – With a short interest near 25% (over a third of the float vs. average daily volume), any positive news or rally could trigger a squeeze. Coupled with sector rotation into “defensive growth,” ORA could see an outsized move higher on even modest catalysts.

The Numbers That Matter

The underlying fundamentals justify this bullish stance. Ormat’s revenue last year approached $880 million (per company filings), and it’s leveraging that growth – operating income and free cash flow are climbing as projects begin operations. In Q3 2025 alone, Ormat earned roughly $250M in revenue and ~$40M in operating profit (with net income ~$24M). These aren’t chip-shop margins – Ormat often runs mid-40s gross margins due to its mix of generation and equipment sales. Importantly, its power plants generate long-duration cash flows, providing predictable earnings even as it invests in new builds.

On valuations: ORA trades around mid-50s P/E, reflecting its premium status. But note: utilities are typically valued in the mid-teens P/E, so this represents high growth premium. If the growth story plays out, investors will happily pay this P/E – especially as renewable returns are more stable than tech bets. Ormat also pays a small dividend (~0.4%), which while modest, offers a base of support under the stock.

Key stat: Ormat’s 52-week high is $128.97, only ~3% above current prices. A five-cent move above that high would technically clear the path toward our $132 target. With the longer-term uptrend intact (20/50/200-day averages all rising) and a history of stepping onto new equipment contracts every few months, a ~6.5% move to $132 in the next 4 weeks seems entirely plausible. In fact, analysts are generally bullish – tip-ranks shows several top targets above $130 – underscoring that $132 is hardly a stretch.

Technical / Price Action Context

From a chart perspective, ORA has spent September digging in just below its 52-week high after a strong ramp. That “trend-pullback” formation is extremely attractive. The stock pulled back into our 122–126 entry zone on increasing volume, but has since stabilized right around $125 (close to the 20-day SMA). Crucially, it has not violated the 50-day SMA down near $115, meaning the uptrend is still intact.

We like the symmetry: a stop just under $118.80 puts us below both the 20-day moving average and the recent swing low. If ORA instead bursts past $130, the remainder of that rise to $132 is well within reach. In short, the chart is setting up the classic bull flag – a brief consolidation before another leg up – and you never want to fade a coiled bull market stock.

Risks & What Could Go Wrong

Of course, no stock is free of risk. ORA’s biggest bull risk is a classic one: momentum fade. After doubling in a year, a sudden market shift or profit-taking wave could deepen the pullback below our stop zone. Utilities also carry interest-rate sensitivity – if bond yields spike unexpectedly, all “bond-proxy” assets feel pressure (and Ormat’s high P/E makes it not immune). Importantly, Ormat carries more debt than a typical utility (debt/equity ~1.1) to fund its expansions. In a panic selloff, its leverage could amplify losses.

Another risk is execution: some of Ormat’s new projects (like the Sage pilot or foreign builds) carry technical and political execution risk. A big miss on earnings or a delay on a new plant could hurt sentiment. We must admit the bearish case: ORA is richly valued, and a broad market correction especially in growth sectors could drag it down toward $110 or lower.

Bottom Line

Even allowing for these risks, the odds overwhelmingly favor the upside. Ormat checks every bullish box: strong secular tailwinds, solid fundamentals, and a massive, growing backlog of projects secured at good economics. The stock’s chart is finally cooperating, offering a low-risk entry after a healthy breather. If geothermal gains favor as expected, ORA could easily retest and exceed its highs. At minimum, a move back to $128–130 seems almost guaranteed in our view. With our $132 target just 6.5% above today, the risk/reward profile is compelling.

Put plainly: Ormat should roar higher from here, but markets can be funny. That’s why we use a stop-loss at $118.80 to protect against any nasty surprises. All signs point to more green energy gains ahead, so this feels like one of those rare “buy the dip” moments in a real energy innovator.

Not financial advice: This analysis is for informational purposes only. Always do your own due diligence and be aware of market risks before trading.