Nel ASA’s Critical Juncture: Order Book Collapse Tests Survival Strategy

Once hailed as a pioneer in the hydrogen sector, Norway’s Nel ASA now faces a severe crisis of confidence. The company’s operational foundation is eroding, casting serious doubt on its future viability. With shares languishing approximately 93% below their 2021 peak, a pivotal question emerges: can its new technological platform reverse the decline, or is the business model fundamentally flawed?

Financial Metrics Reflect Deep Distress

The market’s verdict is stark. Nel’s shares are currently trading at a price-to-book ratio of 0.87, indicating they are valued below the company’s net asset value. This suggests investors anticipate further value destruction. The stock price has been confined to a narrow band around NOK 2.26, having depreciated by roughly 20% over the past year. Trading activity has also withered, with daily volume collapsing to about 1.7 million shares from a previous average near 3.9 million.

Key Financial Data:
– Market Capitalization: NOK 4.15 billion
– Cash Position: NOK 1.76 billion (as of September 30, 2025)
– Order Backlog: NOK 984 million (representing a near 50% year-over-year contraction)
– Price-to-Book Ratio: 0.87
– 52-Week Trading Range: NOK 1.95 – NOK 3.61

This steep decline is primarily driven by a catastrophic collapse in new orders. The order backlog has nearly halved compared to the previous year, stripping the firm of planning certainty and severely damaging its credibility with institutional investors.

Operational Realities: Layoffs and Production Halts

The deteriorating demand has forced immediate and painful operational adjustments. Early in 2025, Nel reduced its workforce by approximately 20% and temporarily suspended production of certain electrolyzers at its Herøya facility. Financial strain is further evident in the company’s dealings with clients; management has begun reclaiming equipment from projects where customers have fallen behind on payments.

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

Despite the pervasive gloom, a few positive developments surfaced late in 2025. A contract for the HyFuel project, valued at over USD 50 million, ranked as the second-largest deal in the company’s history. However, these announcements failed to generate any sustained positive momentum in the equity market, as they were overshadowed by the firm’s deeper structural challenges.

A High-Stakes Technological Gamble

The company’s strategy now hinges entirely on a technological transition. In December 2025, Nel’s board approved the industrialization of its “Next-Generation Pressurized Alkaline” platform. Backed by up to EUR 135 million from the EU Innovation Fund, production is slated to commence in the first half of 2026.

CEO Håkon Volldal is betting that the improved economics of this new generation will make hydrogen projects profitable without reliance on substantial subsidies. The modular, containerized design aims to eliminate costly building investments and transform complex systems into standardized products.

Analyst sentiment remains overwhelmingly skeptical. The prevailing market consensus leans toward “Sell” or “Underweight” ratings, with an average price target of NOK 2.22. While Citi maintains a target of NOK 2.70, Kepler Cheuvreux anticipates further downside, projecting a price of just NOK 1.90.

The direction will become clearer on February 26, 2026. When Nel presents its Q4 2025 results, it must demonstrate that the industrialization project remains on schedule. Should the commercial launch of this new platform encounter significant delays or problems in the coming months, shareholders may be forced to permanently reassess the company’s prospects for survival.