ITM Power: Retail Investors Cash Out as Stock Surges Past £1 Billion Valuation

ITM Power shares retreat from 166.5p peak as profit-taking accelerates; analyst targets lag at 95p average despite government backing and record revenue growth.

The party at ITM Power is showing signs of a hangover. After a breathtaking rally that saw the hydrogen specialist’s shares soar from 30 pence to a multi-year peak of 166.50 pence, private investors are heading for the exits in droves. The stock was the most-sold name on AJ Bell’s platform last week, with nearly one in every fifty sell orders targeting the company. It also appeared among the top ten most-traded stocks on interactive investor’s platform on Tuesday morning.

The selling pressure has pushed the share price back into the 130-to-135-pence range, trimming the company’s market capitalisation to roughly £1 billion. Market observers see this as textbook profit-taking following a months-long rally that briefly propelled ITM Power into the billion-pound club.

State Backing Fuels the Fire

The surge didn’t happen in a vacuum. In early April, ITM Power secured a £86.5 million government package — a combination of a £40 million equity investment from Great British Energy and a £46.5 million grant from the Department for Energy Security and Net Zero. The funds are earmarked for Project Chronos, a new automated manufacturing line for electrolyser stacks.

Adding to the momentum, the company announced a strategic partnership with Rheinmetall in mid-April to develop synthetic fuel production facilities for NATO applications. The defence angle gave the stock an additional leg up, broadening its appeal beyond pure-play green hydrogen investors.

Analyst Targets Lag Behind the Rally

The disconnect between market pricing and analyst expectations is striking. The average analyst target sits at just 95 pence — well below where the stock has been trading. Berenberg, one of the more bullish houses, lifted its price target to 110 pence after the government funding news and maintains a buy rating. UBS is far more cautious, rating the stock “neutral” with a 60 pence target, pointing to persistent losses and the long road to profitability.

This gap between fundamental valuation and market enthusiasm is the central tension in the ITM Power story. The stock has raced ahead of what even the most optimistic sell-side analysts consider fair value.

Operational Progress Amid the Noise

Behind the trading frenzy, the company is making tangible operational strides. ITM Power reported a record first-half revenue of £18 million for fiscal 2026. Management has raised its full-year guidance to between £35 million and £40 million — representing roughly 400% growth over two years. The year-end adjusted operating loss is expected to come in at no more than £29 million.

The balance sheet looks solid. The company expects to end its fiscal year on April 30 with net cash of up to £215 million, a significant upward revision from earlier estimates. The order book stands at £152 million, with 71% of those contracts classified as profitable.

The Valuation Debate Continues

The fundamental question remains whether the share price can justify itself. For now, the stock is trading at a premium that reflects both the government backing and the defence partnership, rather than current earnings power. If the order book continues to grow and the profitable contract share increases, the analyst targets may start to look stale. Until then, the tug-of-war between retail investors taking profits and the company’s improving fundamentals will keep the stock in focus.