ORA

Ormat Technologies is a vertically integrated geothermal and renewable-energy company that develops, builds, owns and operates power plants and a growing energy-storage business. The top line is growing nicely — revenue rose 12.5% to $990M in FY2025, extending a steady climb from $663M in FY2021 — and margins are respectable for the sector (27.6% gross, 17.1% operating). But the problem is that none of that revenue growth is reaching the bottom line: net income has been stuck at exactly $124M for three consecutive years (FY2023-FY2025), operating income actually fell 1.9%, and diluted EPS slipped 1.0% to $2.02. Return on equity is a thin 4.9%.

The reason earnings are flat despite revenue growth is the capital intensity of the build-out. Capital expenditures jumped 27.1% to $620M — nearly double the $335M of operating cash flow (which itself fell 18.5%) — so the growth is being funded externally, with long-term debt rising 13.5% to $2.66B, short-term borrowings up sharply, and total liabilities up 14.5%. Heavy depreciation ($292M, up 11.1%) on the expanding asset base absorbs much of the revenue gain. This is a classic 'growth that does not yet earn its cost of capital' situation, with returns diluted by the very investment driving the revenue line.