Raser Technologies (RZ) is gradually transforming itself from a developmental stage company to an operating geothermal power producer, although not a “pure play”.

Looking forward, this yet to break-even company will likely transform its barren financials through the commencement of production at its first geothermal plant in Utah, purchased power agreements (PPAs), turbine deliveries, extension of the production tax credit (PTC), in addition to Symetron’s progress in its SUV demonstration vehicle and heavy duty alternators.

However, limited revenue potential, mounting losses, and dependency on external funds in light of tight credit markets continue to collectively weigh on the stock.

As with most alternative energy companies, RZ is currently valued entirely on very optimistic future expectations, and if the company lives up to expectations, RZ may prove to be a great long-term investment.

Accordingly, with a mixed outlook for the stock, we maintain a speculative Hold recommendation on RZ common stock with a six-month target price of $4.50.

Looking ahead over the longer-term, while RZ has been trading in an increasingly narrow sideways channel over the last 8 months, this pattern should eventually break to the upside once the geothermal plants commence production.

Provo, Utah-based Raser Technologies, Inc., founded in 2002, operates as a geothermal power development and technology licensing company in the United States.

Read the full analyst report on “RZ”
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