State Cash Flows In, But ITM Power’s Share Price Still Awaits Conviction

British government buys 10% stake for £40M, but ITM Power shares remain near lows amid EBITDA loss forecast and analyst?? despite growing order book.

The British government has become one of ITM Power’s largest shareholders, yet the market is refusing to rally behind the news. Great British Energy bought a stake of just over 10% in the second quarter of 2026, injecting £40 million of fresh equity into the hydrogen electrolyser manufacturer. Shares in the AIM-listed company changed hands at €1.35 on Wednesday, a gain of 3.62% from Tuesday’s close of €1.30, but the stock remains 47.75% below its May high of €2.58. The state backing was intended to de-risk the investment case, not fuel another leg of selling. That hasn’t happened.

Investors are instead weighing the tangible milestones against a still-uncertain path to profitability. ITM Power’s order book has swelled to £152 million, with the share of profitable contracts climbing from 60% in April 2025 to 71% today. First-half revenue for fiscal 2026 hit a record £18 million, driven by equipment sales and engineering services, while the gross loss narrowed year-on-year from £10.2 million to £6.5 million. Yet management is sticking to its forecast of an EBITDA loss between £27 million and £29 million for the full year. The market has taken a dim view: the stock has dropped 13.65% over the past 30 days.

The government money is earmarked for the Chronos production line at the company’s Sheffield site, which is designed to deliver up to one gigawatt of annual manufacturing capacity through automated clean-room processes. ITM Power is building on its existing Trident platform to keep execution risk in check. Sheffield, once a steel town, is being repositioned as a hub for industrial electrolyser production. Separately, two big projects sit in the pipeline: a 15-megawatt electrolyser with Protium at Cromarty in Scotland, with a final investment decision due in December 2026, and two projects with Germany’s Stablegrid Group totalling 710 megawatts of electrolyser capacity, where a first investment decision is expected later this year.

Analysts cannot agree on what the stock is worth. Berenberg sees fair value at 200 pence, while Goldman Sachs continues to recommend a sell. The consensus across all covering houses is just 131 pence – a spread that reflects deep disagreement about the company’s commercial trajectory. “State money funds the factory, but it doesn't create conviction among traders,” one London-based analyst said privately, noting that the annualised 30-day volatility stands above 106%. The relative strength index has slipped to 42.7, below the neutral 50 mark but not yet in oversold territory.

For bulls, the balance sheet offers a measure of comfort. ITM Power held £197.8 million in cash as of the last report, and the twelve-month cash burn amounted to only £9.2 million. With 71% of the order book now under profitable contracts, the revenue mix is healthier than it was a year ago. A positive decision on either the Cromarty or Stablegrid projects could meaningfully expand the pipeline, and the Chronos line, once running at scale, should lower unit costs and push margins higher. The stock still trades 24.82% above its 200-day moving average, a signal that the medium-term trend has not broken.

The bearish case centres on execution. Chronos relies on bespoke automation that may not ramp smoothly, and legacy, low-margin contracts from earlier years continue to weigh on gross margins. Both Cromarty and the Stablegrid projects are still awaiting final investment decisions; any delay would push revenue recognition further into the future. Meanwhile, competition from larger players such as Plug Power is intensifying in the volatile green hydrogen market. The shares are already 20.06% below their 50-day average, and if the order book conversion fails to translate into real cash flows, the recent downtrend could accelerate.

The tension between industrial policy and private-market scepticism is unlikely to resolve quickly. ITM Power’s near-term fate hinges on two concrete events: the Cromarty final investment decision in December 2026 and the Stablegrid decision expected later this year. Until then, the stock will probably continue to oscillate between hope over government backing and doubt about commercial reality – a tug-of-war with no clear winner yet.