Nel ASA's 0.28 EUR Stalemate: Cost-Cutting Electrolyser Can't Mask Order Backlog Slide

Nel ASA has delivered a technological milestone, but the market is refusing to pay up. The Norwegian hydrogen specialist this week began commercial deployment of its new pressurized alkaline electrolysis platform, a system developed over eight years at its Herøya facility that promises to slash system costs by 40-60% compared with current offerings. The stock, however, is stuck at 0.28 euros — roughly 11% below its May high and flat for the week after a brief 2.3% dip on Wednesday. The problem? Investors have heard the cost-reduction pitch before, and they want to see orders before they chase the stock higher.

The platform itself is a genuine engineering achievement. Nel says it can reduce project timelines and execution risks, directly addressing the twin curses of green hydrogen: high capital intensity and slow deployment. The company has already started industrializing production, with a final investment decision for Herøya announced in December 2025. Initial capacity of 1 gigawatt per year is targeted, scaling to 4 GW over time, underpinned by up to 135 million euros in potential funding from the EU Innovation Fund. Nel also sees applications in defence and energy security, where distributed hydrogen production cuts reliance on central infrastructure.

Yet the share price — 0.28 euros in Oslo and half that level in the US listing — tells a more sobering story. After a blistering 47% monthly rally that peaked near 0.32 euros, the stock has entered a consolidation phase. Technically, the move is healthy: the 50-day moving average sits at 0.21 euros and the 200-day at 0.20 euros, both well below the current price, while the relative strength index has cooled to 37, leaving room for another leg up. But the fundamental backdrop is giving traders little reason to push the pedal.

Should investors sell immediately? Or is it worth buying Nel ASA?

Nel's first-quarter results, released in late April, laid the reality bare. Contract revenues fell 5% year-on-year to 148 million Norwegian kroner, and EBITDA came in at negative 100 million kroner — though that was a 15 million kroner improvement over the year-ago period. More troubling, the order backlog shrank 24% to 1.113 billion kroner. Chief executive Håkon Volldal described the first-quarter order intake as "rather quiet," though he flagged a potential PEM division order in the second quarter and further deals by mid-year. The company holds 1.4 billion kroner in cash, providing a cushion, with additional EU disbursements expected in the current quarter.

The sector-wide malaise only amplifies Nel's problem. Fellow electrolyser maker HydrogenPro reported a first-quarter revenue of just 16 million kroner and an EBITDA loss of 32 million kroner, and has launched a strategic review to shore up liquidity. Investors are recalibrating their expectations for a capital-intensive industry that remains years from profitability. As one analyst put it, revenue growth alone no longer cuts it — cash burn and the path to breakeven now dominate the conversation.

Analyst ratings reflect the uncertainty. Kepler Cheuvreux sticks with "Underperform" and a target of 1.90 Norwegian kroner, well below the current Oslo price. RBC and Berenberg are both neutral. Consensus estimates project losses per share persisting for the next several years, meaning any valuation argument hinges on future orders and eventual margin expansion. Technical models suggest short-term upside potential, but the fundamental case is far from clear.

All eyes now turn to July 15, when Nel reports second-quarter earnings. That report will need to show a tangible pickup in order intake, especially for the new platform, which now moves into commercial sales. Until then, the stock is likely to oscillate between the momentum of its March rally and the hard question of how quickly Nel can turn a cheaper electrolyser into cash. At 0.28 euros, the market is saying: show me.

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