Nel ASA's Backlog Buys Time, But the PA-Series Must Deliver Where It Matters
Published on 08/18/2026 at 15:10 | Redaktion boerse-global.de
The Norwegian hydrogen equipment maker finds itself in an unusual position: order books are swelling, the balance sheet is comfortable, and yet the share price keeps drifting lower. That disconnect — between a company executing its stated strategy and a market that remains unconvinced — is now the central tension for Nel ASA investors.
New orders in the second quarter jumped 224 percent year-on-year to 230 million Norwegian kroner, lifting the total backlog to 1.2 billion kroner. That pipeline, combined with cash reserves of 1.3 billion kroner, gives management the runway it needs to scale up production of its newly launched PA-Series electrolyzer platform without tapping external capital in the near term. The company formally introduced the pressurized alkaline line in May, touting a 40 to 60 percent reduction in capital expenditure for turnkey installations — a pitch aimed squarely at a market where cost competitiveness has become the decisive factor.
A European Boost and a Costly Legal Detour
The expansion plan received a significant tailwind roughly two weeks ago when the EU awarded Nel €135 million in funding for the PA-Series production line. The announcement nudged the stock up 0.7 percent — a modest reaction that hints at how much skepticism has built into the current valuation.
That skepticism is not without cause. Revenue in the second quarter fell 12 percent year-on-year to 182 million kroner, while EBITDA swung to a loss of 155 million kroner. The red ink was largely attributable to a one-off settlement with Japanese partner Iwatani Corporation, which cost Nel the equivalent of $7.5 million to resolve a legal dispute. Stripping out that charge, underlying EBITDA was roughly flat against the prior-year period, management said during the earnings call.
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The settlement carries a silver lining beyond the balance sheet: it removes the risk of further litigation costs in the United States and provides clarity for forward planning. For investors, it represents a burden that should not recur — the more persistent challenge remains the revenue decline itself.
Market Skepticism, Measured in Basis Points
The equity market has responded to this mixed picture with a distinct lack of enthusiasm. The stock recently changed hands at €0.1958, down 4.5 percent over the past week. That leaves the shares 46 percent below the 52-week high of €0.3655 reached in May, and roughly 8.6 percent beneath the 200-day moving average of €0.2142 — technical evidence that the medium-term downtrend remains firmly intact.
Analyst commentary has done little to alter the mood. In early August, J.P. Morgan cut its price target on Nel to 1.80 Norwegian kroner from 2.90 kroner, maintaining a "Neutral" rating. The revision reflected a reassessment of dynamics in the alkaline electrolyzer segment — precisely the market the PA-Series is designed to address.
The Long Game in a Crowded Field
The broader opportunity remains substantial. Market research firm Future Market Insights projects the global hydrogen electrolyzer market will reach $8.81 billion by 2036, with on-site installations expected to drive roughly 58 percent of demand in 2026. That is the segment Nel is targeting with its new platform.
Whether the PA-Series converts that addressable market into actual orders — and stabilizes margins in the process — will only become clear over the coming quarters. The 1.2 billion kroner backlog provides a foundation, but the combination of falling revenue and one-off charges underscores that the path to sustainable profitability is not yet complete. The next earnings release will offer the first concrete read on whether the new platform is generating the early orders management has promised. Until then, the gap between operational ambition and share price performance is likely to persist.
