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The final 12 months have been a bit tough for the ITM Energy (LSE:ITM) share value. The once-loved hydrogen energy inventory has suffered yet one more blow to its valuation, with the inventory falling by over 40%. That continues a downward pattern that began in early 2021.
Nevertheless, regardless of what this unstable implies, the underlying firm’s lastly beginning to ship tangible outcomes. Income within the first half of its 2025 fiscal 12 months (ending in April) virtually doubled, from £8.9m to £15.5m year-on-year. On the similar time, adjusted earnings have additionally barely improved from a lack of £18.1m to a lack of £16.8m.
Clearly, the agency has a protracted solution to go. Nevertheless, with extra buyer contracts signed and spectacular technological developments achieved, this could possibly be the start of ITM Energy’s long-awaited comeback.
Lowering prices by way of innovation
Because of its REFHYNE II venture with Shell and two new contracts signed for its NEPTUNE V electrolyser with German prospects, ITM Energy’s order backlog has simply hit a document excessive of £135m. And with the hydrogen market in Europe beginning to warmth up, administration has already introduced demand’s rising, hinting that the order e book has a lot additional to develop all through the remainder of 2025.
Encouragingly, the group’s investments in analysis & growth are additionally paying dividends. In November, ITM Energy introduced that it had discovered a solution to scale back the quantity of iridium its electrolysers use by 40% with out sacrificing efficiency or sturdiness. Why does that matter?
The German Mineral Assets Company expects demand for iridium to surge between now and 2040. But it surely’s really one of many rarest metals on the planet. As a result of complexities concerned in its extraction, provide’s at present not anticipated to maintain up, leading to a commodity that might enhance in value considerably over the approaching a long time.
By decreasing ITM’s reliance on this aspect for its expertise, the enterprise might have simply saved itself an unlimited quantity of variable bills in the long term. And whereas it might take a while for the underside line to succeed in the black, that is yet one more step nearer to profitability.
What’s across the nook?
Opinions from institutional analysts are a bit combined. Of the 17 analysts monitoring the enterprise, three nonetheless consider the inventory has additional to fall, giving it a Promote score, seven stay unsure with a Maintain score, whereas the remaining seven both have the inventory rated as a Purchase or Outperform.
Nevertheless, by way of a share value goal for the subsequent 12 months, it appears the common consensus is that ITM Energy will attain 61.5p, with one analyst believing the shares might rise as excessive as 105p by this time subsequent 12 months. Meaning, within the best-case state of affairs, a £1,000 funding proper now could possibly be price £3,486 by March 2026.
In fact, quite a lot of issues need to go proper for such a powerful return to materialise. Full-year steerage for the rest of ITM Energy’s 2025 fiscal 12 months suggests the second half has slowed by way of income and earnings. And the full-year underlying loss is definitely on observe to be barely bigger than 2023’s $30.4m.
This would possibly merely be a results of rising pains on the trail to turning into a worldwide hydrogen chief. However with a spotty observe document of hitting targets, an funding proper now comes paired with quite a lot of danger. Personally, that’s not one thing that tempts me, given the alternatives elsewhere within the markets proper now.
