Ormat Technologies is a renewable and alternative energy provider that operates around the world. It owns more than 150 power plants, generating over 2,000 megawatts of power in 30 countries. We all need power even during the pandemic crisis or other economic struggles. However, despite that coronavirus, Ormat managed to keep its earnings up. It is a major provider of geothermal energy in Honduras, Kenya, Guatemala, and the U.S.
Lots of tech companies are very profitable. However, during the pandemic crisis, some stocks collapsed, ending in the red. Last quarter was very hard, as the futures struggled, and the central banks and governments were trying to help them recover.
While there weren’t many gainers, Ormat Technologies was one of them. The company’s first-quarter results came in at 51 cents per share, surpassing the forecasts.
Ormat lowered over the year. How did it influence the stock?
Ormat’s revenues declined year-over-year by 3.5% to $192.1 million. The loss was reflected in the share value, which dropped by 17% year-to-date. The stock has also underperformed in the broader markets.
However, those declines increase the value potential of the stock. Ormat’s electricity segment features high margins, thus giving the firm a strong foundation for future income.
JPM’s analyst Mark Strouse thinks that Ormat is one of the higher-quality stocks in the Alt Energy coverage universe. He evaluated this company’s pros and cons and gave the stock a Buy rating. The analyst’s view is based on relative balance sheet strength, along with earnings power and visibility that originates in the shift toward ownership and operation of a diversified portfolio of geothermal projects.
After Strouse upgraded his stance on Ormat shares, he set his price target at $82, implying a 32% upside. Two other analysts also reviewed Ormat, giving it one Buy and one Hold rating. This makes the consensus view a Moderate Buy.
