A Hydrogen Stock That’s Quadrupled in a Year — and Why June Could Decide Its Fate

ITM Power shares soar 400% to 154.80p, but analysts see overvaluation. The Chronos electrolyser line, a £86.5M funding gamble, and a NATO defence deal with Rheinmetall will decide the stock's fate.

ITM Power’s share price has surged more than 400 percent over the past twelve months, leaving the stock trading at 154.80 pence — a level that most analysts consider unjustified by the fundamentals. The London-listed electrolyser maker now finds itself at a crossroads, with a single project in Sheffield set to determine whether the rally has legs or is headed for a sharp correction.

The Chronos Gamble

All eyes are on the company’s planned Chronos manufacturing line, a facility designed to produce PEM electrolysers with double the power density at significantly lower cost. ITM Power is targeting a capacity of one gigawatt by 2028, but the project’s financing rests on two pillars. Great British Energy has committed 40 million pounds in strategic equity, while the Department for Energy Security and Net Zero has pledged a 46.5 million pound grant — subject to approval by the UK’s Competition and Markets Authority, expected in June. Management plans to take the final investment decision immediately after that green light.

The stakes could hardly be higher. No other project in ITM Power’s portfolio carries as much weight for the share price trajectory.

Record Revenue, Persistent Losses

The first half of fiscal 2026 delivered the highest half-year revenue in the company’s history: 18 million pounds, with 15.5 million coming from equipment sales. Management responded by lifting the full-year forecast to between 40 million and 43 million pounds.

Yet profitability remains elusive. The operating loss is expected to land around 30 million pounds, and analysts see no near-term path to positive net income. The balance sheet offers a cushion: according to Zeus Capital, ITM Power holds nearly 198 million pounds in cash — enough to cover current cash burn multiple times over. Net liquidity, as Morgan Stanley notes, covers capital consumption roughly fivefold.

A New Frontier: Defence

Beyond the core hydrogen business, ITM Power has opened an entirely new market through a strategic partnership with Rheinmetall. The Giga-PtX project aims to build hundreds of decentralised sites across Europe for producing synthetic fuels for NATO forces, each with electrolysis capacity of up to 50 megawatts. This defence angle has added a fresh layer of investor excitement to a stock already riding high on hydrogen optimism.

On the civilian side, the company continues to pile up large orders. A 20-megawatt module has been secured for MorGen Energy’s hydrogen project in Wales, along with a long-term service contract. Additional agreements cover installations for Octopus Energy in the UK and design studies in Australia and Canada. The total order book stands at 152 million pounds, with 71 percent of those contracts considered profitable — a sign that the era of loss-making legacy projects is gradually receding.

Analyst Divergence

The analyst community is deeply split. The consensus price target sits at 84.60 pence, roughly 45 percent below the current share price. Morgan Stanley breaks sharply from the pack: the bank upgraded ITM Power to “Overweight” in late April and expects EBITDA breakeven as early as fiscal 2028 — a full year ahead of the consensus view. That scenario requires around 200 MW of new orders. In its base case, Morgan Stanley values the company at nearly 1 billion pounds.

The valuation gap is stark. With a price-to-sales ratio of roughly 38, the stock leaves little room for operational disappointment in the coming quarters. Many institutional investors remain on the sidelines, deterred by the lack of a clear path to positive net earnings.

Skin in the Game

CEO Dennis Schulz has been granted a special award of 1.3 million shares on top of his regular LTIP package of 906,238 shares. Those shares will vest only if Chronos delivers — the conditions include profitable contracts and specific milestones tied to the new production line. Management is effectively betting alongside shareholders.

A capacity reservation with RWE for 150 MW of Neptune V electrolysers, plus agreements in Germany exceeding 710 MW, add further weight to the order pipeline. The market is also awaiting results from the UK’s hydrogen allocation round and a final decision on the Uniper project at Humber.

The June Test

If the share price holds support at 130 pence and Chronos gets the go-ahead in June, the rally has room to extend. But if the investment decision falters or the CMA review drags on, the gap to the analyst consensus could close quickly. For a stock that has quadrupled in a year, the next few weeks will be decisive.