Nel ASA: A Surge in Orders Fails to Translate to Profitability

Nel's order backlog surged 364% in Q4 2025, but revenue fell 31% and losses mounted. The hydrogen firm must now convert demand into profit.

Nel ASA finds itself navigating a critical paradox. While the Norwegian hydrogen company is successfully securing a growing pipeline of business, its financial performance tells a starkly different story. The firm's future hinges on its ability to convert this booked demand into tangible profits, moving beyond what some might call financing its operations on the promise of tomorrow.

Financial Performance Lags Behind Operational Momentum

The company's full-year 2025 results revealed significant challenges. Revenue fell to NOK 963 million, representing a decline of approximately 31% compared to the previous year. Its EBITDA finished deep in negative territory at NOK -275 million. The net loss for the fourth quarter alone reached NOK 870 million, a figure substantially impacted by asset write-downs.

This weak earnings picture stands in sharp contrast to the activity in its order books. Nel reported a staggering 364% year-over-year increase in order intake for Q4 2025, reaching NOK 686 million. Sequentially, this also marked a 34% gain from the third quarter. By year-end, the total order backlog had grown to roughly NOK 1.32 billion. A cash position of about NOK 1.6 billion provides the company with necessary liquidity.

Strategic Bet on Heavy-Duty Logistics

The company's strategy is firmly anchored in the emerging demand for green hydrogen within the freight and logistics sector. Manufacturers, including Daimler Truck, are accelerating their transition to liquid hydrogen for long-haul transportation. Nel is positioning itself as a key infrastructure supplier for this very market.

This segment recently saw a significant development with the expansion of the "cellcentric" joint venture. Originally a partnership between Volvo Group and Daimler Truck, it has now been joined by Toyota as an equal partner, underscoring the industry's collective push.

Market Experts Maintain a Cautious Stance

Despite the operational momentum, sentiment among financial analysts remains predominantly negative. Out of eleven covering analysts, seven currently advocate selling the shares, while six recommend holding. Notably, not a single analyst has issued a buy recommendation. The consensus average price target sits around NOK 2.14, which is considerably below the stock's recent trading level. Over the past twelve months, Nel's share price has declined by approximately 14%.

The prevailing view suggests that skepticism will persist until the company demonstrates a consistent capability to transform its impressive order backlog into sustainable profitability and positive margins.