The Norwegian hydrogen specialist delivered a second-quarter report that left investors grappling with two contradictory narratives. Order intake surged to 230 million Norwegian kroner, a 171 percent jump from the first quarter and a 224 percent year-on-year leap, yet the stock continued its slide, closing at €0.1922 on Friday — down 1.94 percent on the day and more than 15 percent over the past month. The disconnect between operational milestones and market sentiment has never been wider.
Revenue from customer contracts fell 12 percent year-on-year to 153 million kroner, though total revenue of 182 million kroner showed a sequential improvement. The headline earnings picture, however, turned uglier: EBITDA swung to minus 155 million kroner, compared with minus 100 million in the first quarter and minus 86 million a year earlier. Including a one-time charge of 70 million kroner linked to the Iwatani settlement, the net loss reached 189 million kroner. Strip that item out and underlying EBITDA was flat against the prior year — hardly
Cash Burn Becomes the Defining Metric
The balance sheet tells a more stark story. Nel’s cash pile shrank to 1.328 billion kroner by quarter-end, down from 1.928 billion a year ago. With an order backlog of 1.213 billion kroner — itself 3 percent lower than last year — the company is burning through liquidity faster than it is converting new orders into cash. An analyst on the earnings call pressed management directly on the funding runway, underlining the market’s central fear: that Nel may need to raise capital before the next-generation technology translates into meaningful revenue.
That next-generation bet is the PA-Series alkaline electrolyser platform, launched commercially on May 6 with key partners. It cuts space requirements by 80 percent and capital costs by 40 to 60 percent. Management expects initial orders in the coming months. A €135 million EU grant is backing the PA-Series production ramp, with the first milestone payment already received in the second quarter. Nel aims to reach 500 megawatts of annual manufacturing capacity by the end of 2026 and 1 gigawatt by 2027.
Should investors sell immediately? Or is it worth buying Nel ASA?
Leadership Vacuum at a Pivotal Moment
CEO Håkon Volldal, who took the helm in July 2022, announced his departure to pursue another opportunity. The timing could hardly be more delicate. Nel is simultaneously scaling next-generation production, managing a declining cash balance, and contending with an unprofitable operating base. Management itself acknowledges that profitability requires alkaline volumes of several hundred megawatts per year and a PEM utilisation rate of 20 to 24 percent — neither threshold has been reached.
Analysts have turned decisively bearish. Of the seven covering the stock, none rate it a buy and all seven recommend selling. The average price target sits at 2.12 Norwegian kroner, a level that implies roughly 50 percent upside from the current €0.1922 (about 2.20 NOK at recent exchange rates). That target, however, reflects the long-term potential of the technology rather than near-term business momentum.
Technical Signals Point to Oversold Territory
The stock now trades 24.54 percent below its 50-day moving average of €0.2547 and just 11 percent above its 52-week low of €0.1731. The relative strength index is hovering at 30.0, a level that often precedes a technical bounce. Any near-term rally would likely face stiff resistance at the 50-day average, and a sustained recovery would require evidence that the PA-Series orders materialise beyond the containerised PEM deals already booked — worth about $7 million each.
Nel’s position within the broader hydrogen sector adds another layer of pressure. Across the peer group — FuelCell Energy, Bloom Energy, HydrogenPro and Ceres Power — the common theme is a punishing reassessment of how much growth should cost. Nearly all of them have tapped capital markets or absorbed dilution in recent weeks. For Nel, the next quarterly report — due in the third-quarter reporting season — will test whether the order surge can finally start narrowing the EBITDA deficit while the company searches for a new leader to steer through the financing gap.
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