Ormat Technologies (ORA) Is Up 6.8% After New 27-Year Geothermal Pact and Q2 Beat Has the Outlook Shifted?

• Ormat Technologies recently reported second-quarter 2025 results that exceeded analyst expectations and extended a 25-year geothermal power purchase agreement with the Southern California Public Power Authority, securing supply until 2052.
• The combination of strong financial performance and securing long-term contracts highlights growing demand for baseload renewable energy and strengthens Ormat’s revenue visibility.
• We’ll examine how the renewed long-term contract with Southern California Public Power Authority may impact Ormat Technologies’ investment outlook.

Find companies with promising cash flow potential yet trading below their fair value.

Ormat Technologies Investment Narrative Recap

Owning shares of Ormat Technologies means believing in the long-term need for reliable, carbon-free baseload power, with geothermal energy playing an essential role. The new 25-year power purchase agreement with the Southern California Public Power Authority further supports revenue consistency but does not significantly reduce the key risk: the energy storage segment’s exposure to pending U.S. regulatory changes on battery sourcing, which could impact growth past 2028.

Among recent announcements, the extension of the Southern California agreement stands out as most relevant, directly linking Ormat’s financial performance to strong utility demand for geothermal energy in a major U.S. market. This announcement reinforces an important catalyst: the ability to secure premium, long-term contracts amid heightened demand for renewable baseload power, supporting continued growth in revenue visibility and cash flows.

Yet, despite these contractual wins, investors should also keep in mind that if U.S. regulations affecting lithium battery imports tighten after 2028, Ormat’s energy storage expansion could face significant challenges...

Read the full narrative on Ormat Technologies (it's free!)

Ormat Technologies is projected to reach $1.2 billion in revenue and $171.7 million in earnings by 2028, based on analyst forecasts. This outlook assumes annual revenue growth of 9.4% and reflects a $40.4 million increase in earnings from the current $131.3 million.

Uncover how Ormat Technologies' forecasts yield a $94.60 fair value, a 7% downside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community range from as low as US$11.35 to as high as US$236.13, showing major splits in outlook. With revenue visibility increasing from new long-term contracts, you can explore why opinions about Ormat’s future can vary so widely.

Explore 4 other fair value estimates on Ormat Technologies - why the stock might be worth less than half the current price!

Build Your Own Ormat Technologies Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Ormat Technologies research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free Ormat Technologies research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Ormat Technologies' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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