ITM Power: The Bullish Insider Bet That Tangles With a Cooling Order Book

The recent insider purchase by Sir Warren East, the former Rolls-Royce chief who knows a thing or two about corporate turnarounds, has thrown a spotlight on ITM Power at a moment of deep uncertainty. On the one hand, the director’s £197,000 outlay for 172,000 shares at the end of June signals confidence at the top. On the other, the hydrogen electrolyser maker’s stock has shed 43% from its May peak of €2.58, closing recently at €1.46 — a level that leaves the year-to-date gain of 102% looking fragile.

The divergence between insider conviction and market sentiment stems from a core metric that has begun to sour: the book-to-bill ratio. This key gauge of order intake relative to revenue has slipped from 5.5 at the end of last financial year to just above 4. The management team’s reluctance to predict a reversal on the latest earnings call has left investors questioning whether the pace of new orders can keep up with accelerating deliveries. Revenue hit a record £18m in the first half, and the gross loss narrowed sharply, but the order backlog of £152m — while still substantial — risks being eaten away if the flow of fresh contracts does not revive.

The company’s balance sheet offers a buffer. With nearly £198m in cash, ITM Power is not under immediate financial pressure. Analysts at Berenberg doubled their price target to 200 pence from 110 pence, and Morgan Stanley has also upgraded the stock. Supporters argue that the recent pullback is merely a consolidation within a longer-term uptrend, and that the underlying operational improvements — a bigger revenue base, falling losses, and a strong cash position — justify a higher valuation.

Should investors sell immediately? Or is it worth buying ITM Power?

But the bears point to the rich pricing already baked into the shares. The forward price-to-earnings ratio has been modelled at almost 187, leaving no room for disappointment. Technically, the breach of the €1.75 support level has reinforced a bearish view, and the annualised volatility of around 115% underlines how quickly sentiment can shift. The risk, critics warn, is that once the existing order book is worked through, a gap in the project pipeline could emerge.

That is where the Cromarty project in Scotland becomes pivotal. ITM Power has a framework agreement with developer Protium to supply electrolysers for the hydrogen facility, which has already secured UK government funding from the first allocation round. The final investment decision is scheduled for December 2026. Success would transform ITM from a pure equipment vendor into a project partner, unlocking a new revenue stream. Failure to reach a final go-ahead, or a delay, could prolong the current slide.

Whichever scenario plays out, the next set of results — for the fiscal year ending April 2026 — will be critical. If profit margins improve and the book-to-bill ratio stabilises or climbs, the optimists will be vindicated, and the stock could mount a challenge to the 52-week high. If the orderbook continues to shrink, the path may lead to the 200-day moving average at €1.06. For now, the market is caught between a director’s vote of confidence and a slowing order book, with the final verdict still years away.