ITM Power – shares at 66.20p expected to react upwards with increased contract win news, plus the Hydropulse deal, TP 94.50p

01.09.2025

The Final Results to end-April recently announced by the £410m-capitalised ITM Power (LON:ITM), showed a strong performance and pointed to ongoing growth – but, as yet, the group’s shares have hardly flickered with investor interest, however that could soon change.

The group reported a 50% hike in revenues to £26.0m (£16.5m), but with an increased adjusted EBITDA loss of £33.0m (£30.4m), while its end-year cash balance was better than expected at £207m (£230.3m), against a ‘guided figure’ in the range of £160m to £175m.

The contracted firm year-end order backlog was a record at £145.1m (FY24: £79.7m), with 60% of backlog now derived from profitable contracts, the remaining 40% being legacy contracts.

The group stated that it expects to recognise about half of the legacy contracts in revenue during FY26.

Management Comment

Chairman Sir Roger Bone stated that:

“Our strategy is clear; operationally, ITM is in great shape, and we are financially in a healthy position.

Over the next year, we will continue to invest in our core technology, enabling us to remain at the forefront of the industry.

We will also introduce more automation, particularly in stack assembly, which will enhance our production capabilities.

After our year-end, we announced the launch of Hydropulse in June 2025, tailored for industrial users with dependable hydrogen needs, which will build, own, and operate decentralised green hydrogen production plants using ITM's modular NEPTUNE technology.”

The Business

Founded in 2000 and listed in 2004, the Sheffield-based company is capitalised at £410m.

ITM Power specialises in the design and manufacture of electrolysers utilising proton exchange membrane (PEM) technology to generate green hydrogen—currently the only net zero energy gas—using renewable electricity and water.

As the global shift towards decarbonisation intensifies, hydrogen’s role as an energy source is becoming increasingly significant.

The company is dedicated to advancing the production and application of green hydrogen through its proprietary PEM electrolyser technology.

ITM Power’s systems are optimally integrated with renewable energy sources, employing solely renewable electricity and water to produce green hydrogen via electrolysis.

The resulting hydrogen can be stored in gaseous or liquid form, injected into the gas grid, utilised as a ‘clean fuel’ for vehicles, or applied across various industrial processes, thereby contributing to substantial emissions reductions within logistics and heavy industry sectors.

Additionally, the PEM units possess the capability to respond rapidly to the fluctuations inherent in renewable power generation, ensuring suitability for grid balancing and addressing energy supply deficits.

The Hydropulse Project

In late June, the group launched Hydropulse GmbH - a Berlin-based subsidiary that will build, own, and run decentralised green hydrogen plants using ITM’s NEPTUNE technology to serve industrial clients under long-term agreements. 

On Tuesday 26^th August, the group announced that it has entered into a strategic partnership with ABO Energy, which is a leading international renewable energy business that develops and builds wind and solar farms, as well as battery storage and hydrogen projects. 

The German group has some 1,400 employees operating on four continents working on the development, planning, financing, construction, operational management, and maintenance of plants for a sustainable energy supply. 

Dennis Schulz, CEO of ITM Power, stated that:

"This is about market traction.

With ABO Energy's access to sites and end users, we can realise projects faster and turn our technology into recurring revenues.

Our modular approach, combined with ABO Energy's project pipeline, creates a pragmatic route to help industry cut emissions.

The partnership will also help us unlock new markets."

ABO Managing Director Karsten Schlageter enthusiastically described the strategic partnership by stating that:

"It's a breakthrough moment for many hydrogen projects.

We can now offer our customers a one-stop solution from development to long-term operation without capex intensity.

Many of our projects are already developed to a stage where we can move quickly when the offtake is committed.

With Hydropulse on board, we can now offer our customers long-term reliable plant operation with a strong technology partner.

This collaboration allows us to fast-track projects and deliver real value for industry."

Analyst Opinions

Some 11 analysts follow the company, with six calling the shares as a Buy, three call them a Hold, one says they will Outperform, while the other declares that they are a Sell.

The consensus average Target Price is now 94.50p, with the lowest call being for 40p, while the highest Target Price is 310p.

A week ago, analyst Daniel Slater at Zeus Capital increased his Target Price for ITM Power’s shares from 70p to 90p.

He noted that he had adjusted his expectations for FY 2026 based on the group’s new guidance given in the FY 2025 results.

“With improved cost control reducing cash outflows and a revised sales strategy adding more profitable contracts to the order book.

The company’s simplified product slate and revised marketing strategy is beginning to result in numerous new contract wins, with contract backlog now £145.1m as of April 2025, and significant additional potential awards based on initial FEED contracts and capacity reservations.

ITM has also rationalised its manufacturing capabilities, to focus on an ability to reliably deliver its electrolysers at volume and, going forward, we look for increased contract execution to demonstrate the company’s capabilities here, and for this to be seen in revenues and in progress towards achieving profitability.

We also look for further contract wins to help provide line of sight to the future revenue potential implied by our valuation.”

In My View

I feel that this group’s shares, now 66.20p, will gradually respond positively to further good contract news, with 100p being a good Target at which to aim certainly within the next year, if not a lot sooner.