Ormat Technologies Expands Growth via Geothermal and Energy Storage

Ormat Technologies Inc. ORA is expanding its growth through investments in geothermal and energy storage, supported by the rising adoption of renewable energy sources worldwide. The company continues to add generation capacity and advance projects, strengthening its presence in the geothermal energy market.

However, this Zacks Rank #3 (Hold) company faces risks from tariff pressures on its energy storage business and geopolitical tensions affecting its operations in Israel.

Key Growth Drivers for ORA

With the growing adoption of renewable energy sources worldwide and geothermal energy being a sustainable and reliable option, Ormat Technologies has a strong opportunity to expand its presence in the global geothermal energy market, with geothermal accounting for 81.3% of its Electricity segment generation capacity in 2025.

Ormat commenced or expanded commercial operations of 39 megawatts (MW) of geothermal power plants in 2025. As of Dec. 31, 2025, the company had a total generating portfolio of 1.7 gigawatts, which includes geothermal facilities, energy storage assets, recovered energy generation and solar PV plants. Ormat plans to add 149 MW of new capacity by the end of 2027, with geothermal projects contributing 101 MW. The company has also completed the construction of an additional 22 MW of geothermal capacity at its Blue Mountain power plant in Nevada.

ORA plans to invest $180 million in the construction of its energy storage assets. At present, it has six projects under development in the energy storage segment, which are expected to add 410 MW/1,540 MWh to its portfolio. These initiatives are likely to support Ormat in achieving its target of expanding its energy storage portfolio to 950-1,050 MW/2,500-2,900 MWh by the end of 2028 in the United States.

Risks to ORA’s Growth Outlook

A sustained increase in tariffs or the continuation of existing tariff levels over an extended period could slow the growth of Ormat’s Energy Storage segment in the United States if the company is unable to pass on higher costs to customers. This may impact its long-term expansion plans in the energy storage business and, to a lesser extent, affect the overall company growth.

Ormat’s facilities in Israel, including those near the Port of Ashdod, face risks from rocket fire from the Gaza Strip, with some incidents occurring close to its sites. Houthi attacks in the Red Sea have disrupted global shipping routes. These factors have led to longer lead times, supplier delays, higher transportation and component costs, and increased expenses for expedited shipping and insurance. As a result, the delivery of key components has been impacted, which may affect the company’s ability to meet commitments in its Product segment.

ORA Stock Price Movement

In the past six months, ORA shares have rallied 12% compared with the industry’s growth of 5%.

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Stocks to Consider

Some better-ranked stocks from the same industry are GE Vernova Inc. GEV, which sports a Zacks Rank #1 (Strong Buy), and Constellation Energy Corporation CEG and Alvopetro Energy Ltd. ALVOF, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

GEV’s long-term (three to five years) earnings growth rate is 18%. The Zacks Consensus Estimate for its 2026 revenues stands at $44.72 billion, which suggests year-over-year growth of 17.5%.

CEG’s long-term earnings growth rate is 21.62%. The Zacks Consensus Estimate for its 2026 earnings per share (EPS) is pegged at $12.22, which implies a year-over-year improvement of 30.1%.

The Zacks Consensus Estimate for ALVOF’s 2026 revenues stands at $75.8 million, which suggests year-over-year growth of 30.8%. The Zacks Consensus Estimate for its 2026 EPS stands at 79 cents, which calls for a year-over-year rise of 29.5%.

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Constellation Energy Corporation (CEG): Free Stock Analysis Report

Ormat Technologies, Inc. (ORA): Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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