Nel ASA Faces a Pivotal Year as Stock Hovers Near Lows
17.01.2026 - 06:21:03
Trading at approximately 2.26 NOK, shares of hydrogen technology firm Nel ASA are lingering near multi-year lows. This valuation places the company below its book value, reflecting significant market skepticism about management's ability to execute a turnaround. The coming period, particularly 2026, is shaping up to be a decisive chapter that will test the viability of its new strategic direction.
Recent twelve-month figures reveal a challenging financial position. Revenue stands at about 1.05 billion NOK, contrasted by a net loss of 458.58 million NOK. This translates to a negative profit margin of 43.75% and a loss per share of 0.26 NOK.
Key Financial Metrics:
* Price-to-Book Ratio: 0.87 (indicating valuation below net assets)
* Return on Equity: -9.42%
* Return on Total Capital: -5.70%
* Cash Position: Roughly 1.76 billion NOK (as of September 2025)
* 52-Week Trading Range: 1.95 – 3.61 NOK
The stock's performance has significantly lagged the broader market. Over the past year, it has delivered a return of just 0.26%, underperforming the OBX Total Return Index's gain of 17.87% by approximately 17 percentage points.
A Concerning Contraction in Orders
A critical area of concern is the sharp decline in the company's order backlog and intake. The order backlog has nearly halved within a year, falling to 984 million NOK—a 47% drop compared to Q3 2024. Quarterly order intake has plummeted to just 57 million NOK, representing a 64% year-over-year decrease. This erosion severely limits visibility for future revenue streams.
The operational impact has been direct and tangible:
* Workforce Reduction: Approximately 20% of employees were laid off in early 2025.
* Production Pause: Parts of the electrolyzer manufacturing at the Herøya facility were temporarily halted.
* Asset Retrieval: Equipment was reclaimed from projects involving delinquent customers.
These steps highlight the intense pressure on Nel's core business operations.
Strategic Bet on Next-Generation Technology
Management is now placing a substantial strategic wager on its new "Next-Generation Pressurized Alkaline" platform. In December 2025, the board approved the industrialization of this technology at Herøya, a project bolstered by committed funding of up to 135 million euros from the EU Innovation Fund.
Should investors sell immediately? Or is it worth buying Nel ASA?
The rollout is planned in distinct phases:
* An initial investment of around 300 million NOK for 1 GW of capacity.
* Market Launch: First half of 2026.
* Industrial-Scale Deliveries: Commencing from 2027.
The objective is to achieve a substantial reduction in the cost of hydrogen production, partly through modular, container-based solutions. A key uncertainty is whether this new platform can offset the decline in the traditional business; early orders and adherence to the project timeline will be crucial factors.
Cautious Sentiment Among Market Experts
Equity researchers are predominantly maintaining a cautious stance on the stock. The consensus recommendation sits in "Sell" or "Underweight" territory. The average price target of 2.22 NOK aligns closely with the current share price, but the range of estimates is wide—spanning from 1.20 NOK to 4.20 NOK—illustrating divergent views on the company's prospects.
Selected analyst positions include:
* Citi: "Neutral" rating with a 2.70 NOK target.
* Kepler Cheuvreux: "Reduce" recommendation and a 1.90 NOK target.
This disparity in price targets underscores the mixed assessments of the new technology platform's potential.
February 26th: An Upcoming Catalyst
The next significant test will arrive with the Q4 2025 results, scheduled for release on February 26, 2026. Investor focus will likely center on:
* Progress in industrializing the new platform at Herøya.
* Any signs of stabilization in the order backlog.
* The trajectory of the cash burn rate.
* Confirmation of the commercial launch timeline for 2026/2027.
Having declined 93% from its 2021 peak, Nel ASA enters this critical period with vastly diminished expectations. The upcoming quarterly report and project milestones will be instrumental in determining whether the equity can emerge from its period of weakness or if the prevailing skeptical market valuation will persist.
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