Nel ASA’s Backlog Grows, But the Ledger Tells a Bleaker Story

The gap between Nel ASA’s order intake and its bottom line has become the defining narrative for the Norwegian hydrogen equipment maker. New business is flowing in, yet the income statement remains stubbornly awash in red ink — a disconnect that continues to shape how the market views the stock weeks after its second-quarter report landed.

Orders Climb While Losses Deepen

The July figures painted a decidedly split picture. Order intake jumped to 230 million Norwegian kroner, pushing the total backlog to 1.21 billion kroner. That headline strength, however, collided with a 12 percent slide in revenue from customer contracts to 153 million kroner, while the EBITDA loss widened to 155 million kroner. The net loss for the period reached 189 million kroner, a figure that includes a 70 million kroner settlement payment tied to the legal dispute with Iwatani.

That settlement, disclosed roughly three weeks ago, has since cost the shares another 2.0 percent. The same period also saw JPMorgan trim its price target to 1.80 kroner from 2.90 kroner while maintaining a Neutral rating — a move that has weighed on the stock by an additional 1.2 percent. The EU funding decision and the Iwatani resolution each triggered only modest downward moves of roughly one to nearly three percent, underscoring a pattern of gradual erosion rather than a single shock event.

A Wall of Analyst Skepticism

The broader analyst community has turned notably cautious. A survey of 14 analysts published just over a week ago produced a consensus rating of “Sell” with a twelve-month price target of approximately 2.08 kroner. The stock closed the previous session at 0.1938 euro, down 1.1 percent, and now trades about 5.0 percent below its 50-day moving average — evidence that near-term weakness persists without any meaningful change to the technical picture.

The company’s cash position adds another layer of concern. Nel ended the second quarter with 1.33 billion kroner in cash, a substantial drawdown from the 1.93 billion kroner recorded in the same period last year. That shrinking liquidity buffer, combined with the persistent operating losses, leaves limited room for error as management works through its turnaround plan.

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

Technicals Offer Little Comfort

Automated trading models are equally unenthusiastic. One technical analysis tool recently assigned the stock a “Hold/Accumulate” rating, noting that shares had already fallen 10 percent since a sell signal emerged in mid-August. The relative strength index stands at 40.3, placing the stock in neutral-to-slightly-oversold territory without generating a clear buy signal.

The current price of 0.1922 euro sits 47 percent below the 52-week high of 0.3655 euro reached in May, with the company’s market capitalization hovering around 359 million euros. A separate reading puts the RSI at 38.6, reinforcing the sense of a market lacking both selling pressure and buying conviction.

What Comes Next

Nel points to ongoing work on new electrolyzer products and cost-reduction initiatives as the levers to reverse its weak operational performance. The backlog of roughly 1.2 billion kroner provides some visibility into coming quarters, though it offers little clarity on when that pipeline will translate into profitable growth.

The next meaningful checkpoint arrives on October 21, when Nel publishes its third-quarter interim report. Investors will be watching whether the EU funding decision leaves any operational imprint and whether the order trend can hold. Until then, the prevailing analyst caution is likely to remain a persistent drag on the share price.