Israel stocks higher at close of trade; TA 35 up 0.23%

Ormat Technologies, Inc. ORA recently announced that it has agreed to sign an Engineering, Procurement and Construction (EPC) contract with Contact Energy, involving geothermal energy. This contract, valued at $200 million, entails the development of the 101-megawatt (MW) Te Mihi Stage 2 geothermal power plant in New Zealand.

Te Mihi Stage 2 will gradually replace the outdated Wairakei geothermal station and is slated to be completed by mid-2027.

ORA’s Position in Geothermal Generation

With the effects of climate change becoming increasingly evident, the shift to renewable energy sources like geothermal has increased in recent times to effectively reduce greenhouse gas emissions. Since geothermal plants can provide power to the grid constantly unaffected by weather or daylight, this source of energy serves as a flexible and reliable form of backup power during major electricity outages or disruptions.

This is likely to have prompted Grand View Research to forecast a compound annual growth rate (CAGR) of 3.1% for the global geothermal energy market during the 2024-2030 time period.

Ormat Technologies, being a forerunner in generating electricity from geothermal energy, stands to gain significantly from the aforementioned market growth prospect. The latest EPC contract is the fourth major geothermal project in New Zealand, highlighting its expertise in binary technology, which works well for high-temperature geothermal sites.

Ormat Technologies expects its year-end Product Segment backlog to exceed $300 million following the contract signing. Most of the revenues from this deal will be recognized in 2026 and 2027. The Te Mihi Stage 2 project, along with 160 MW of other projects underway in New Zealand, strengthens ORA’s position as one of the leading companies contributing to this nation’s renewable energy capacity expansion.

Subject to final investment decision, Contact Energy is planning a second phase of development named Te Mihi Stage 3, which is expected to come online by mid-2031. ORA is expected to clinch another EPC contract for this facility, which, in turn, is likely to boost its future revenues.

Opportunities for ORA’s Peers

Some other companies, which are increasing investments in geothermal generation and are expected to gain from the expanding global geothermal market, are discussed below.

Baker Hughes Company BKR: It has been working on geothermal energy for more than 40 years, with projects in more than 30 countries around the world. The company has developed a prototype metal-to-metal mud motor with a mud-lubricated bearing assembly and a titanium transmission for harvesting energy from an enhanced geothermal system in Iceland.

The company has a long-term (three to five years) earnings growth rate of 25.9%. The Zacks Consensus Estimate for BKR’s 2024 sales indicates year-over-year growth of 8.4%.

Halliburton Company HAL: It provides a wide range of products, technology and integrated services to help reduce costs and manage risks in geothermal projects. The company works closely with clients to develop the best solutions for various types of geothermal energy projects.

The company has a long-term earnings growth rate of 2.7%. The Zacks Consensus Estimate for HAL’s 2025 sales indicates year-over-year growth of 3.2%.

ORA Stock’s Price Movement

Shares of ORA have gained 3.4% in the past month compared with the industry’s 11% growth.

U.S. stocks were mixed, with the Nasdaq Composite falling around 50 points on Wednesday.

Shares of Paymentus Holdings, Inc. rose sharply in today's session after the company reported better-than-expected third-quarter financial results and issued FY24 revenue guidance above estimates.

Also, Baird maintained an Outperform rating on the stock and raised its price target from $25 to $36.

Paymentus Holdings shares jumped 23.8% to $32.97 on Wednesday.

Here are some other big stocks recording gains in today's session.

• Jet.AI Inc. J shares surged 56% to $10.36. Jet.AI's board approved $2 million share repurchase program through 2025 and announced withdrawal of S-1 registration.
• Dave Inc. shares jumped 46.8% to $92.19 after the company reported better-than-expected third-quarter adjusted EPS results and raised its FY24 sales guidance.
• Rocket Lab USA, Inc. gained 36% to $19.93 after the company reported better-than-expected quarterly financial results. The company also announced a multi-launch agreement with a confidential commercial satellite constellation operator and was awarded a federal defense contract worth up to $8 million.
• Paragon 28, Inc. rose 34.8% to $10.20 following third-quarter results.
• The Honest Company, Inc. gained 28.3% to $6.16 after the company reported better-than-expected quarterly sales results.
• Organogenesis Holdings Inc. gained 27.5% to $4.4000 following third-quarter results.
• Altus Power, Inc. gained 21.5% to $3.7788 after the company reported better-than-expected quarterly EPS and sales.
• Natera, Inc. gained 20% to $162.15 after the company reported better-than-expected third-quarter financial results and issued FY24 revenue guidance above estimates.
• Rivian Automotive, Inc. gained 15.3% to $12.19 after the company announced a joint venture launch with Volkswagen for a total deal size worth up to $5.8 billion.
• JetBlue Airways Corporation rose 15.3% to $7.28.
• Tower Semiconductor Ltd. gained 11.8% to $48.22 after the company reported better-than-expected quarterly financial results.
• James Hardie Industries plc rose 9.9% to $34.93.
• CAVA Group, Inc. gained 9.1% to $158.26 after the company reported better-than-expected third-quarter financial results and raised its FY24 net new restaurant openings outlook and same sales growth.
• Albemarle Corporation rose 7.1% to $110.09.
• Spotify Technology S.A. gained 6.9% to $448.39 following third-quarter earnings.

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