Morningstar Rating

Stock Research and Analysis

by Mark Barnett

Bulls Say

Ormat's growth potential is impressive in the U.S. states that have both renewable energy portfolio requirements and geothermal potential. International markets will be much larger, but could develop more slowly.
Ormat has been designing geothermal equipment since 1965. The company has deep experience in the industry and is a market leader, with the most efficient and widely utilized binary cycle plant design at lower temperatures.
Ormat can use the flexibility of the renewable tax credit system to help fund investment and has been able to issue favorable corporate debt as well. Read more 

Bears Say

Geothermal plants tend to be built in remote locations, which makes transmission expensive and damps demand for electricity generated from the technology.
Exploration risk is a concern as Ormat began doing its own exploratory drilling in 2006. High capital costs for exploration and the potential for failure are serious issues with attracting capital and competing with other generation sources.
Operations outside the U.S. subject Ormat to extra political risk, and the U.S. isn't without its risks around renewable policy, despite repeated renewals of the production tax credit. Read more 


Ormat Technologies was founded and managed for years by the Israeli husband-wife team of Lucien and Yehudit "Dita" Bronicki. After Israeli investment fund FIMI acquired a joint controlling stake in Ormat's parent Ormat Industries--repaying a loan taken   Read more 


Ormat derived 68% of 2014 revenue from building and operating geothermal plants, and 36% from manufacturing geothermal and recovered energy equipment. It operates 18 plants   Read more 

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