| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | 35.10 | -43 |
| Graham Formula | 24.50 | -60 |
Ormat Technologies, Inc. (HNM.DE) is a leading player in the geothermal and recovered energy power sector, headquartered in Reno, Nevada. The company operates through two primary segments: Electricity and Product. Ormat designs, develops, builds, owns, and operates geothermal and recovered energy-based power plants, leveraging its proprietary technology to convert waste heat into electricity. With manufacturing operations in Israel, Ormat serves a global clientele, emphasizing sustainability and renewable energy solutions. As part of the Utilities sector, Ormat stands out for its niche focus on geothermal energy, positioning it as a key contributor to the transition toward cleaner energy sources. The company’s diversified revenue streams—spanning power generation and equipment sales—enhance its resilience in volatile energy markets. Ormat’s commitment to innovation and operational efficiency makes it a noteworthy player in the renewable energy landscape.
Ormat Technologies presents a compelling investment case due to its strong positioning in the geothermal and recovered energy sector, a niche with high barriers to entry and growing demand for renewable energy solutions. The company’s diversified revenue model, combining power generation and equipment sales, provides stability. However, risks include high capital expenditures (€487.7M in FY 2024) and substantial total debt (€2.45B), which could strain liquidity. With a market cap of €3.69B and a beta of 0.51, Ormat is relatively low-volatility compared to broader markets. The diluted EPS of €2.04 and a dividend yield (implied from €0.56/share) may appeal to income-focused investors, but the company’s growth prospects hinge on continued global adoption of geothermal energy.
Ormat Technologies holds a competitive advantage through its vertically integrated business model, combining power plant ownership with proprietary equipment manufacturing. This dual-segment approach allows Ormat to capture value across the geothermal energy supply chain. The company’s expertise in recovered energy—converting industrial waste heat into electricity—further differentiates it from pure-play geothermal firms. Ormat’s long-term power purchase agreements (PPAs) provide revenue visibility, while its global footprint mitigates regional demand risks. However, competition from larger renewable energy players and conventional utilities diversifying into geothermal could pressure margins. Ormat’s reliance on geothermal—a geographically constrained resource—also limits scalability compared to solar or wind energy. The company’s technological edge and established project pipeline strengthen its positioning, but execution risks and high upfront costs remain challenges.