Ormat Technologies (ORA:NYS) Fundamental Valuation Report

Ormat Technologies (ORA:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Ormat Technologies(ORA:NYS)

Utilities:Utilities – Renewable

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$76.08 (USD) 03/30/2021

Weighted Valuation
$79.44 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 4.4%

Valuation Models Adjusted Book Value: $75.51 (USD)
(in order of importance) Discounted Cash Flow: $80.98 (USD)
Comparables: $88.13 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Fairly valued on an Asset Valuation
According to Analyst consensus at $95.67 this stock is Undervalued

Company Overview (ORA:NYS USD)

Price 76.08
Range 74.14 – 77.59
52 week 54.86 – 126.02
Open 75.65
Vol / Avg. 666058/823045
Mkt cap 4.26B
P/E 46.11
Div/yield 0.44/0.01
EPS 1.65
Shares 55.98M
Beta 0.39

Company Description

Ormat Technologies derives approximately 80% of its revenue from building and operating geothermal plants and the rest from manufacturing geothermal and recovered energy equipment. Nearly two thirds of its capacity is in the United States, with the balance in Africa and Central America. Nearly all the plants have long-term contracts with local utilities.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for ORA:NYS

Using a discounted cash flow model we generated an intrinsic value of $80.98 (USD) for ORA:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

ORA:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $80.98 1% 5% 1% 5%
WACC (or Ke) 5.11 $105.20 $64.84
Terminal Growth Rate 0.10 $66.22 $103.11
Tax Rate 0.40 $89.99 $71.98
Cash Flow 514,514,000 $75.55 $86.41
Capital Expenditures 0 $80.98 $80.98
Long Term Debt 805,698,000 $81.70 $80.26

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $88.13 (USD) for ORA:NYS. We also generated a valuation of $97.84 (USD) using other metrics and comparables.
The comparable companies were NextEra Energy Partners (NEP:NYS), Pattern Energy Group (PEGI:NAS), Clearway Energy (CWEN.A:NYS) and Advent Technologies Hldgs (ADN:NAS).

Company ORA:NYS End Date Value
Earnings/Share $1.65 (USD)
Book Value/Share $32.26 (USD)
Sales/Share $13.58 (USD)
Cash Flow/Share $5.10 (USD)
EBITDA/Share $7.76 (USD)
Price Based on Comps Adjustment Factor (%)
$202.27 (USD) -29.0
$145.51 (USD) 0.1
$53.88 (USD) -25.0
$4.70 (USD) 15.4
$101.02 (USD) 0.0
ORA:NYS Ratios Used Average Values NEP:NYS PEGI:NAS CWEN.A:NYS ADN:NAS
46.11 PE Ratio 122.59 0.00 0.00 122.59 0.00
2.36 PB Ratio 4.51 2.32 0.00 2.92 8.29
5.60 PS Ratio 3.97 5.38 0.00 2.56 0.00
14.91 PCF Ratio 6.52 7.42 0.00 5.62 0.00
13.13 EV to EBITDA 13.01 11.88 0.00 14.14 0.00

Multiples

Using a multiples approach we generated a valuation of  $71.85 (USD) for ORA:NYS

Company ORA:NYS End Date Value
Earnings/Share $1.65 (USD)
Book Value/Share $32.26 (USD)
Sales/Share $13.58 (USD)
Cash Flow/Share $5.10 (USD)
EBITDA/Share $7.76 (USD)
Price Based on Comps Adjustment Factor
$52.79 (USD) 0
$78.53 (USD) 0
$58.08 (USD) 0
$76.98 (USD) 0
$92.87 (USD) 0
Ratios Ratio Average
PE Ratio 31.99
PB Ratio 2.43
PS Ratio 4.28
PCF Ratio 15.09
EV to EBITDA 11.96

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  ORA:NYS for the last 10 years was  2.34

We ran the Adjusted Book Value for  ORA:NYS and generated a book value of  $32.26 (USD)
By multiplying these we get an adjusted valuation of  $75.51 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for ORA:NYS. The 3 analysts have a concensus valuation for ORA:NYS for 2021 of $95.67 (USD).

ORA:NYS Ormat Technologies

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 2 0 3.2500 Hold 2021-3-29

Current Price: 76.08 USD

Analyst Consensus
USD Millions 2021 2022 2023
Mean EPS 1.46 1.91 2.16
# EPS Analysts 4 4 2
Mean Revenue 675.60 779.30 837.20
# Revenue Analysts 4 4 2
Mean Target Price 95.67
Mean Cash Flow 4.48 5.53 6.03
Mean EBITDA 400.00 453.40 514.00
Mean Net Income 79.40 104.80 118.80
Mean Debt Outstanding 1,037.50 1,058.00 1,045.50
Mean Tax Rate 33.75 32.50 35.00
Mean Growth Rate 16.99
Mean Capital Expenditure 400.20 357.80 375.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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