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Ormat Technologies (ORA) Up 2.8% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Ormat Technologies (ORA - Free Report) . Shares have added about 2.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Ormat Technologies due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Ormat Technologies Beats on Q2 Earnings, Ups Revenue View

Ormat’s second-quarter earnings per share (EPS) came in at 23 cents, which surpassed the Zacks Consensus Estimate of 21 cents by 9.5%. The bottom line, however, decreased 48.9% year over year.

Revenues

In the quarter under review, Ormat Technologies generated revenues of $146.9 million, which missed the Zacks Consensus Estimate of $147 million by a whisker. Moreover, the top line declined 16% on a year-over-year basis due to significantly lower revenues from its product segment.

Segment Revenues

Electricity Segment: Revenues in this segment amounted to $133.9 million in the second quarter, which rose 4% year over year.

Product Segment: Revenues in this segment plunged 83% to $7.4 million.

Energy Storage Segment: Revenues in this division amounted to $5.6 million, surging a solid 123.8% from the prior-year quarter.

Operational Update

In the reported quarter, Ormat Technologies’ total operating expenses were $23.4 million compared with operating expenses of $17.3 million in the second quarter of 2020.

The company’s operating income declined 40.5% year over year to $28.7 million in the second quarter.

The company’s total cost of revenues was $94.9 million, down 13.3% year over year.

Interest expenses were $18.6 million, which decreased 5.9% year over year.

Financial Condition

Ormat Technologies had cash and cash equivalents of $250 million as of Jun 30, 2021, compared with $448.3 million as of Dec 31, 2020.

The company generated cash from operating activities worth $33 million as of Jun 30, 2021 compared with $55.2 million as of Jun 30, 2020.

Guidance 2021

Ormat Technologies currently projects to generate revenues in the range of $650-$685 million in 2021, up from its prior guided range of $640-$680 million..

The Zacks Consensus Estimate for the company’s revenues is pegged at $659.2 million, lower than the mid-point of the company’s guided range.

The company still anticipates annual adjusted EBITDA of $400-410 million for 2021.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 14.25% due to these changes.

VGM Scores

Currently, Ormat Technologies has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ormat Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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