Institutional Investors Amplify Stakes in Geothermal Leader Ormat

Ormat US6866881021

Shares of Ormat Technologies, a specialist in geothermal energy, are attracting heightened focus from the institutional investment community. This trend is highlighted by recent portfolio activity, including a new position established by Assenagon Asset Management S.A. The firm acquired 38,839 shares, representing an approximate 0.06% stake. This move coincides with typical year-end portfolio rebalancing and signals sustained professional investor confidence in the renewable energy sector.

The growing institutional attention aligns with a period of solid financial execution. In its most recent quarter, Ormat reported a 17.9% year-over-year increase in total revenue, reaching $249.7 million. This growth was fueled by the successful execution of international projects and an expansion of the company's domestic energy storage portfolio.

A key growth driver has been the energy storage solutions business, where revenue surged 108.1% to $20.4 million, propelled by the commissioning of new facilities. Meanwhile, the product segment, which handles the manufacture and sale of power generation units, boasts a record backlog of $295 million—a substantial 79% increase compared to the previous year. Strong demand for reliable, baseload renewable power, particularly from data centers and industrial customers, is accelerating contract signings in this division.

Revenue from the electricity segment remained steady at $167.1 million. This operational diversification helps mitigate the impact of lower energy prices at some of Ormat's geothermal complexes.

Major Funds Consolidate Holdings

The entry of Assenagon is part of a broader pattern of institutional accumulation. The Canada Pension Plan Investment Board maintains a substantial existing position of 660,255 shares. Other significant investors, including Russell Investments Group Ltd. and Comerica Bank, have also recently expanded their engagements. Russell notably increased its holdings by 30.7%. Collectively, institutional investors and hedge funds now control roughly 95.49% of Ormat's outstanding shares.

Strategic Initiatives and Analyst Outlook Bolster Confidence

Market sentiment is further supported by a strategic partnership with SLB aimed at accelerating the development of Enhanced Geothermal Systems (EGS). Analyst consensus continues to reflect a positive "Moderate Buy" rating on the stock, with seven out of twelve covering analysts recommending either "Buy" or "Strong Buy."

In a notable move on December 17, Piper Sandler significantly raised its price target from $102 to $125 per share. The firm cited expanding EBITDA margins and the successful integration of the Blue Mountain geothermal power plant as key reasons for the upgrade. Ormat has reaffirmed its long-term goal to increase total generation capacity to a range of 2.6 to 2.8 gigawatts by 2028. The company's confirmed EBITDA guidance for the full year 2025, set between $575 million and $593 million, remains a critical benchmark for assessing its operational progress.