Ormat to Gain From Expanding Global Geothermal Energy Market
We recently issued an updated research report on Ormat Technologies Inc. ORA. The company registered third-quarter 2018 adjusted earnings of 31 cents per share, which missed the Zacks Consensus Estimate of 44 cents by 29.6%. Earnings also declined 39.2% from the prior-year quarter.
Ormat Technologies bears a solid opportunity to expand in the global geothermal energy market, which according to the GEA’s Geothermal Power: International Market Update is expected to grow from 13.8 gigawatts (GW) in 2017 to 23 GW by 2021.
What’s Driving the Stock?
Ormat Technologies already enjoys an established geothermal market in the countries of Honduras, Mexico and Indonesia and is lately expanding its footprint in nations like China, New Zealand and the Philippines.
The company has shifted its focus to developing Solar PV power plants in locations where it can offer competitively priced power generation. This is because the market for Solar PV power has grown significantly in recent years, driven by a combination of favorable government policies and decline in equipment prices.
Furthermore, the developing global energy storage market offers the company significant opportunities to expand. This is evident as Ormat Technologies acquired Virdity Energy last year to accelerate long-term growth, expand market presence, and further develop its energy storage, demand response and energy management services.
However, Ormat Technologies' international operations expose the company to risks related to the application of foreign laws, taxes, economic conditions, labor supply and relations, political conditions, and policies of foreign governments. Such macro scale risks may adversely affect the company’s ongoing business, financial condition and cash flows.
Estimates for Ormat Technologies have been revised downward over the past 30 days. The company’s earnings surpassed the Zacks Consensus Estimate only once in the trailing four quarters, average being 10.86%.
Ormat Technologies, Inc. Price and Consensus
Ormat Technologies, Inc. Price and Consensus | Ormat Technologies, Inc. Quote
Zacks Rank and Key Picks
Ormat Technologies currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same space are Clearway Energy, Inc. CWEN, Ameresco, Inc. AMRC and Statoil ASA EQNR. While Clearway Energy sports a Zacks Rank #1 (Strong Buy), Ameresco and Statoil carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Clearway Energy delivered average positive earnings surprise of 178.04% in the last four quarters. The Zacks Consensus Estimate for current-year earnings has been revised 26.1% upward to $1.45 per share over the past 90 days.
Ameresco delivered an average earnings surprise of 164.96% over the trailing four quarters. The Zacks Consensus Estimate for 2018 earnings has been raised 8.5% to 77 cents per share over the past 90 days.
Statoil came up with average beat of 14.43% in the preceding four quarters. The Zacks Consensus Estimate for 2018 earnings has increased 14.4% to $2.14 per share over the past 90 days.
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