Nel ASA Faces Critical Earnings Test Amid Persistent Challenges
21.01.2026 - 12:17:05
Shares of Nel ASA are under significant pressure as the company approaches its next financial report. Trading at approximately 2.25 NOK, the stock price remains well below its annual peak, with a continuing downward trend firmly in place. All eyes are now on the Q4 report scheduled for late February, which market participants hope will reveal whether the firm can begin to stem its substantial losses.
A clear downtrend has characterized the stock's performance for several months. Over the trailing twelve months (TTM), Nel has reported a net loss of roughly 459 million NOK, translating to an earnings per share (EPS) of -0.26 NOK. A profit margin of -43.75% underscores the ongoing significant cash outflow.
Key financial metrics paint a challenging picture:
* Return on Equity: -9.42%
* Return on Assets: -5.70%
* TTM Revenue: 1.05 billion NOK
* TTM Net Loss: -458.58 million NOK
* Cash and Equivalents: 1.76 billion NOK
* Price-to-Book Ratio: 0.88
A price-to-book ratio below 1 indicates the market is valuing the company below its stated book equity. This pricing reflects widespread investor concern that Nel will not achieve profitability in the near term.
All Eyes on the Forthcoming Q4 Report
The upcoming release on February 26th, covering the fourth quarter and full year 2025, represents a crucial milestone. The company's third-quarter 2025 results already showed a 17% revenue decline to 303 million NOK, with EPS at -0.05 NOK.
Consensus analyst expectations for Q4 2025 are:
* EPS: -0.07 NOK
* Revenue: Approximately 265.74 million NOK
Such figures would represent a year-over-year quarterly revenue drop of about 41%, a clear sign that operational headwinds persist.
Should investors sell immediately? Or is it worth buying Nel ASA?
Divergent Analyst Views
Market experts display notable disagreement regarding the stock's outlook:
* Average Price Target: 2.21 NOK
* Range of Price Targets: 1.20 NOK to 4.20 NOK
* Kepler Cheuvreux: "Reduce" rating with a 1.90 NOK target
* Citi: "Neutral" rating with a 2.70 NOK target
The wide dispersion in price targets highlights the uncertainty surrounding Nel's future path, with forecasts ranging from continued weakness to a potential recovery.
Strategic Bet on Next-Generation Technology
From a strategic standpoint, Nel is pinning its hopes on its new platform of pressurized alkaline electrolyzers. In December 2025, the company made the final investment decision to industrialize this technology at its Herøya facility in Norway.
The project is set to receive support of up to 135 million euros from the EU Innovation Fund. A commercial launch is planned for the first half of 2026, with a capacity expansion to follow in 2027. The initial 1 GW production line requires an investment of roughly 300 million NOK before accounting for grants.
The platform's objective is to significantly reduce the levelized cost of hydrogen (LCOH), thereby improving the economics of projects that have thus far been heavily reliant on subsidies.
Challenging Market Conditions Persist
Recent trading volume has been around 3.16 million shares, below the average of 3.87 million. The company's market capitalization stands at approximately 4.14 billion NOK. Concurrently, the green hydrogen market is developing more slowly than initially anticipated, increasing pressure on Nel's business model.
In the short term, much depends on whether the upcoming quarterly report can demonstrate initial progress in revenue momentum and earnings trends. Furthermore, the company's investment narrative surrounding its new electrolyzer technology needs to be supported by concrete financial data.
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