Ormat's Q4 Catalyst: Will the February 26th Call Confirm the Growth Story or Expose Valuation Risks?

The clock is now ticking down to a critical test for Ormat. The company will publish its fourth-quarter and full-year 2025 financial results in a press release issued on Wednesday, February 25, 2026, after the market closes. The formal assessment of those numbers will follow the next day, with the company's management team hosting a conference call to discuss the results at 10:00 a.m. ET on Thursday, February 26, 2026.

Investors will be watching for a repeat of the company's recent pattern of beating expectations. In the second quarter of 2025, Ormat delivered an EPS of $0.48, topping analysts' consensus estimates of $0.37 by $0.11. The upcoming call will be a key moment to see if that momentum continues into the final quarter of the year. The analyst consensus estimate for Q4 2025 EPS stands at $0.68.

This event is a direct test of the stock's aggressive growth narrative. Ormat's recent share price run has likely priced in strong performance, making the February 26th call a high-stakes moment. The company must not only meet but potentially exceed the $0.68 EPS target to justify its valuation. Any miss or a guidance update that tempers growth expectations could quickly reverse the recent gains.

Financial Mechanics: Assessing the Quality of Growth

The recent financial performance reveals a growth story with a clear split. On one side, the headline numbers are strong: total revenue grew 17.9% year-over-year in the third quarter. On the other, the core business is under pressure. The company's primary electricity segment, which has historically been the stable foundation, saw a 2.8% year-to-date decline in revenue. This divergence is the central tension for investors.

The growth is being driven almost entirely by two newer segments. The Product segment revenue surged 66.6% in Q3, while Energy Storage revenue exploded 108.1%. More importantly, these segments are becoming profitable engines. The Energy Storage segment's gross margin nearly doubled to 28.9% in Q3, and the Product segment's margin also expanded significantly. This shift suggests Ormat is successfully transitioning toward higher-margin, project-based revenue streams, which is a positive sign for long-term profitability.

Yet this creates a valuation puzzle. The market is paying a steep premium for this future growth, with a trailing P/E ratio of 50.68. That multiple implies near-perfect execution and sustained high margins from these new segments. The recent volatility in the core electricity business-evidenced by a 3.8% year-over-year decline in Q2 and planned plant curtailments-highlights the risk that this growth is not yet broad-based or stable enough to fully support the stock's price. The February 26th call will test whether management can demonstrate that the Product and Energy Storage momentum is durable enough to offset the electricity segment's weakness.

Trading Setup: Pre-Earnings Positioning and Volatility

The setup for Ormat's February 26th call is one of high stakes and high expectations. The stock is up 57.4% year to date, a run that has likely priced in a flawless growth trajectory. This surge has left the company with a stark valuation reality: it scores 0/6 on valuation checks, suggesting the market may be overpaying for its story. For a stock trading at a trailing P/E of 50.68, any stumble in execution or a hint of slowing momentum could trigger a sharp re-rating.

Key risks are already in the pipeline. Execution delays on the Salt Wells geothermal power plant upgrade are a tangible threat. The project is targeted for completion by the second quarter of 2026, and any slip could jeopardize the planned commencement of a major new power purchase agreement with Switch in 2030. Competition for contracted cash flows is another pressure point, as the renewable energy sector attracts significant capital. Furthermore, the stock remains sensitive to interest rates, which can quickly alter the discount rate applied to its long-term, contracted revenue streams.

The upcoming earnings report is the immediate catalyst that will test this fragile setup. A beat on the Q4 EPS consensus of $0.68 would be expected, but the real test is in the guidance. Management must demonstrate that the explosive growth in its Product and Energy Storage segments is durable enough to offset the ongoing weakness in its core electricity business. A slowdown in that core revenue or a tempered outlook for 2026 could expose the valuation disconnect, leading to a swift correction. The pre-earnings positioning reflects a market that has already made its bet; the February 26th call will determine if that bet was right.

Catalysts and What to Watch

The February 26th call is a binary event. The company must deliver a clean beat on the Q4 EPS consensus of $0.68 to confirm the growth story. More importantly, management needs to maintain its raised full-year guidance, which is the baseline for the stock's current valuation. A miss or a guidance cut would immediately expose the risk that the recent rally has outpaced fundamental execution.

The most significant long-term catalyst on the table is the 13-year power purchase agreement (PPA) with Switch. This deal, which will supply 13 MW of power from the Salt Wells geothermal plant, is a major validation of Ormat's strategy to capture the data center energy boom. Energy delivery is scheduled to begin in Q1 2030, but the company's ability to meet that target is entirely dependent on a critical near-term milestone: the upgrade to the Salt Wells plant must be completed by Q2 2026. Any delay here would jeopardize the entire 2030 delivery schedule and undermine the long-term value of the PPA.

For traders, the immediate signal will be in the numbers and the tone. A Q4 EPS beat, coupled with a reaffirmed 2025 revenue guidance range of $935 million to $975 million, would be the green light. It would suggest the explosive growth in Product and Energy Storage segments is robust enough to carry the stock through the core electricity business's ongoing challenges. Conversely, a miss on EPS or any hint of a guidance reduction would confirm the valuation risk. The stock's 57% year-to-date run has left little room for error. The February 26th call will determine if the growth story is durable or if it's already priced in.