Nel ASA's Technological Bet Confronts a Revenue Reality Check

The Norwegian hydrogen technology firm Nel ASA enters a critical reporting period with its financial performance and technological roadmap on a collision course. All eyes are on its first-quarter 2026 report due April 22, which must address a glaring disconnect between a swelling order book and collapsing sales.

Financially, the company is sending mixed signals. Its order backlog surged to a record NOK 1.319 billion by the end of 2025, marking a 34% increase from the previous quarter. The fourth quarter alone saw order intake skyrocket by 364%. Yet, this growth stands in stark contrast to a precipitous decline in revenue. Customer turnover fell 20% year-on-year in Q4 2025 to NOK 330 million. For the full year 2025, revenue sank 31% to NOK 963 million, accompanied by a net loss that widened to NOK 870 million and impairments totaling NOK 799 million.

Market sentiment reflects this deep uncertainty. Analysts at Berenberg and Citi recently trimmed their price targets, maintaining neutral stances but highlighting persistent risks. Berenberg's James Carmichael cut his target to NOK 2.30, while Citi reduced theirs to NOK 2.40. Both firms point to unpredictable order conversion, ongoing cash burn, and dilution risks within a hydrogen sector grappling with overcapacity. The consensus target sits at NOK 3.32, but estimates range wildly from NOK 0.50 to NOK 8.10.

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

Trading at €0.21 in Frankfurt, the share price sits about 11% above its March 52-week low. The Relative Strength Index (RSI) of 34.8 indicates an oversold condition, but has yet to catalyze a sustained recovery. The company is currently in its mandatory quiet period ahead of the earnings release, leaving the market to parse the data alone.

The company's primary strategic hope rests on its Next Generation Pressurized Alkaline (NGP) electrolyser platform, in development since 2018. Having completed full-scale testing, Nel aims for a commercial launch in the first half of 2026, with serial deliveries commencing in 2027. The system promises manufacturing costs up to 60% lower than current models. This push is bolstered by EU innovation funds, which could provide up to €135 million in support, covering a significant portion of relevant costs.

Nel's balance sheet shows it has the resources to fund this final development phase. The company holds a liquidity reserve of approximately NOK 1.6 billion heading into the second quarter. The estimated cost for the first gigawatt of production capacity, before subsidies, is around NOK 300 million. On the shareholder register, the strategic alliance with Samsung E&A remains intact, with the Korean firm holding a 9.1% stake and viewing Nel as a preferred global hydrogen supplier.

The fundamental question for the April 22 report is whether the NOK 1.3 billion backlog has finally begun translating into recognized revenue. If not, investors will be left waiting for the next potential catalyst: the half-year report scheduled for July 15. The quarter's results will test whether the company's technological promise can finally align with its financial performance.

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