The £198 Million Cushion That Has ITM Power’s Optimists and Skeptics Talking Past Each Other

ITM Power shares surge 400% to 171p, but analysts are divided as the company faces make-or-break decisions this summer amid record orders and widening losses.

ITM Power’s stock has quadrupled over the past year, touching 171 pence in London this week — within striking distance of its 52-week high of 174.80 pence. Yet for all the euphoria, the British electrolyser maker’s rally rests on a series of make-or-break decisions that will land this summer, and the analyst community remains deeply split on what comes next.

The company’s balance sheet tells a compelling story. ITM Power holds roughly £198 million in cash and carries no debt, giving it a runway that Jefferies estimates will keep the lights on without fresh capital until at least 2028. The investment bank recently upgraded the stock to “Buy” and lifted its price target from 115 pence to 200 pence, citing falling capital costs and an improving political backdrop. Morgan Stanley is even more bullish, forecasting revenue of £169 million for fiscal 2028 — 54 percent above the consensus — and issuing its first positive rating on a hydrogen equipment supplier since 2021. Berenberg also recommends buying, with a target of 110 pence.

But the optimism is far from universal. UBS holds at 60 pence, signalling that the stock’s valuation has run ahead of operational reality. And even Jefferies, despite its upgraded stance, warns of an asymmetric risk profile: in a downside scenario, the shares could fall 52 percent, while the upside potential is just 37 percent. The problem, the bank argues, is that the green hydrogen market is growing slowly, with unclear offtake volumes limiting demand to a handful of large industrial projects.

A CTO’s Timing Raises Eyebrows

Insider activity has added another layer of complexity. Just before the stock hit its recent high, Chief Technology Officer Simon Bourne sold roughly 873,000 shares at an average of 157 pence. He had previously exercised 1.33 million options at 32 pence under an old employee programme. The timing of the sale — near the top of a 400 percent rally — has not gone unnoticed.

Chief Executive Dennis Schulz, meanwhile, is taking a different approach. He stands to receive 1.3 million shares that will only vest under strict conditions: profitable contracts and the on-time delivery of the new Chronos production line. The message from the boardroom is clear — management’s incentives are aligned with shareholders, at least in part.

Record Orders, Widening Losses

The underlying business presents a mixed picture. ITM Power posted record first-half revenue of £18 million for fiscal 2026 and raised its full-year guidance to between £40 million and £43 million. Jefferies expects roughly £41 million. The order book stands at £152 million, with 71 percent of contracts now considered profitable — a marked improvement from earlier loss-making projects.

Yet the pretax loss for the year through April 2025 widened to £45.4 million from £27.1 million a year earlier. The cash pile of roughly £198 million covers the current burn rate about five times over, but the company is still years away from profitability. Jefferies does not expect EBITDA breakeven until 2028.

The June Trilogy

Three events in the coming months will determine whether the rally has legs. First, the outcome of the UK’s Hydrogen Allocation Round 2. Second, the final investment decision on Uniper’s 120-megawatt project at the Humber. Third — and most consequential — the go-ahead for the Chronos production line, which ITM expects to receive from the UK competition authority in June.

Chronos is the centrepiece of the growth strategy. The new facility will produce electrolysers with two megawatts of capacity — triple the current model — at 40 percent lower cost. Great British Energy has committed £40 million in equity, and the Department for Energy Security and Net Zero has pledged a £46.5 million grant. The company also has a capacity reservation with RWE for 150 MW of the next-generation electrolyser, plus agreements in Germany totalling more than 710 MW.

The market will have to wait until late October for the full-year results covering the period ended 30 April. By then, the June decisions should have shown whether the 400 percent rally is built on solid ground — or on hydrogen vapour.