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"We rate ORMAT TECHNOLOGIES INC (ORA) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, notable return on equity and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ORA's revenue growth has slightly outpaced the industry average of 0.9%. Since the same quarter one year prior, revenues slightly increased by 7.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ORMAT TECHNOLOGIES INC has improved earnings per share by 28.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ORMAT TECHNOLOGIES INC turned its bottom line around by earning $0.80 versus -$4.76 in the prior year. This year, the market expects an improvement in earnings ($1.39 versus $0.80).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Independent Power Producers & Energy Traders industry average. The net income increased by 27.5% when compared to the same quarter one year prior, rising from $12.95 million to $16.51 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market on the basis of return on equity, ORMAT TECHNOLOGIES INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Even though the current debt-to-equity ratio is 1.35, it is still below the industry average, suggesting that this level of debt is acceptable within the Independent Power Producers & Energy Traders industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.29 is sturdy.
- You can view the full analysis from the report here: ORA Ratings Report