Is Ormat Technologies (ORA) The Best Alternative Energy Stock to Buy Now?

Ormat Technologies (NYSE: ORA) has been making waves in the alternative energy sector, and for good reason. The company's recent financial results for Q4 and full-year 2024 show a strong performance across multiple segments, making it a compelling option for investors looking to capitalize on the clean energy transition. Let's dive into the details to see if ormat technologies is indeed the best alternative energy stock to buy now.

Strong Financial Performance

Ormat Technologies reported a 6.1% increase in total revenues year-over-year for 2024, driven by growth across all three segments: Electricity, Product, and Energy Storage. The Electricity segment saw a 5.3% increase in revenues, while the Energy Storage segment experienced a remarkable 30.6% increase for the full year. The Product segment, in particular, showed significant margin expansion, with gross margins increasing from 13.4% to 18.4%. This indicates that ormat is successfully positioning its technology as premium rather than competing purely on price, which is critical in a market with significant price competition from Chinese equipment manufacturers.

Capacity Additions and Strategic Acquisitions

The company added 253MW of new capacity through organic growth and M&A, with 133MW added to the Electricity segment and 120MW to Energy Storage. This represents approximately 10% capacity growth in a single year, which is impressive for infrastructure assets with multi-decade lifespans. The strategic acquisition of Enel assets has already proven accretive, contributing to the year-over-year growth in the Electricity segment.

Energy Storage Segment Growth

The Energy Storage segment's revenues increased by 56.7% in Q4 and 30.6% for the full year. This growth is driven by the launch of the 80MW/320MWh Bottleneck Energy Storage facility, which marks Ormat's entry into utility-scale, long-duration storage. This positions the company to capture premium capacity payments in congested grid areas.

International Expansion and Strategic Partnerships

Ormat's international expansion continues with the commencement of operations at the 35MW Ijen geothermal plant in Indonesia and a significant Israeli tender win for 300MW/1200MWh of energy storage capacity. These strategic moves diversify geographic exposure while leveraging Ormat's core competencies. Ongoing negotiations with data center operators (hyper-scalers) for approximately 250MW at rates exceeding $100 per MWh demonstrate the premium value of Ormat's baseload renewable generation and the growing corporate demand for 24/7 clean energy.

Sustainable Trends and Future Outlook

Given Ormat's guidance for 2025, these trends appear sustainable. The company guides total revenues between $935-975 million and adjusted EBITDA of $563-593 million for 2025. This guidance represents modest growth that appears achievable given the contracted nature of existing assets and development pipeline visibility. The company's disciplined capital allocation approach and strategic positioning at the intersection of baseload renewable power and energy storage suggest that Ormat is well-positioned to capitalize on the accelerating clean energy transition.

Additionally, Ormat's prudent move to safe harbor PTC eligibility for geothermal projects through 2028 and ITC benefits for storage projects through 2026 significantly de-risks its development pipeline against potential policy changes. Combined with the consistent $0.12 quarterly dividend, management is clearly signaling confidence in stable cash flows.

Conclusion

Ormat Technologies' recent financial performance is driven by revenue growth, margin expansion, capacity additions, strategic acquisitions, and international expansion. These trends are supported by specific data and examples, and given the company's guidance for 2025 and beyond, they appear sustainable. With its strong positioning in both the geothermal and energy storage sectors, Ormat Technologies is well-positioned to capitalize on the accelerating clean energy transition, making it a compelling option for investors looking to buy into the alternative energy sector.