Nel ASA's Order Book Is Booming and Its Revenue Is Falling — AlphaValue Says Price Both

AlphaValue/Baader Europe cut its rating on Nel ASA from "Buy" to "Add" on Friday and slashed its price target to 2.38 NOK from 3.82 NOK, a downgrade that captures the central tension in the Norwegian hydrogen group's third-quarter 2026 report: demand signals are surging even as the income statement deteriorates.

The new stance is a softer call, not a sell. But it makes plain that a stronger order intake does not paper over weakness in the business Nel is actually billing for today.

Two curves moving in opposite directions

Revenue from customer contracts came in at NOK 112 million for the quarter, down 63% year on year. The net loss widened to NOK 141 million, and EBITDA landed at minus NOK 93 million. Against that, order intake jumped 339% to NOK 253 million, and the backlog climbed 34% to NOK 1,314 million.

Those figures describe different things. Orders open the door to future deliveries; they do not replace revenue already lost. For investors, keeping the two apart is the whole exercise — a fuller pipeline improves the outlook without repairing the current quarter.

The split within the top line sharpens the point. PEM revenue rose 65% to NOK 89 million, while the alkaline business collapsed 91% to NOK 23 million. PEM order intake was even more dramatic, up 473% to NOK 245 million.

The PEM number is the one to watch

Whether Nel can recover therefore hinges less on the direction of orders than on whether PEM growth can eventually offset the alkaline slump. PEM has become the carrier of any rebound; a single strong quarter does not prove the company as a whole has stabilized. That would require the growth to persist and to outpace the drag from alkaline electrolysers.

A positive PEM line and a negative operating result are not mutually exclusive — the quarter demonstrated exactly that combination.

Nel's balance sheet offers room to wait. Cash and liquid funds stood at NOK 1,078 million at the end of the quarter, a buffer that sits alongside the negative EBITDA rather than offsetting it. Liquidity is a stock, not evidence that the business has become self-sustaining.

A US order with a 2027 delivery date

On Tuesday, Nel Hydrogen US booked an order worth roughly USD 12 million from an unnamed global technology company headquartered in the United States. The contract covers several containerized MC-series PEM electrolysers plus associated services, with delivery expected in 2027.

That order gives the demand story a concrete horizon — and a concrete limit. Because the equipment will not ship until 2027, it cannot explain the revenue already reported for the third quarter, and it should not be treated as revenue booked.

What would confirm the turn

The bull case rests on PEM growth holding and orders converting into sales. Should Nel execute on the contracted equipment and services, PEM could carry a larger share of revenue and reduce the recovery's dependence on stabilizing alkaline.

The bear case is just as coherent: PEM keeps growing but fails to compensate for the alkaline decline, leaving improved order metrics alongside weak total revenue and further operating losses. On that reading, it is too early to call the higher intake a completed turnaround.

Either way, the yardstick is execution, not order size. The 2027 delivery of the US contract is the nearest checkpoint for judging whether Nel can turn bookings into business. Until then, PEM revenue remains the key test — and Friday's target cut is a reminder that a stronger order book and a weak bottom line can coexist for a while.