Nel ASA Shares Face Headwinds Amid Strategic Shifts

The Norwegian hydrogen technology company Nel ASA is concluding the trading year on a downward trajectory. Its shares, listed in Oslo, are trading around 2.33 NOK, marking a decline of approximately 14% since the start of the year. This performance lags significantly behind the broader Norwegian market, despite the company reporting several key strategic advancements.

Key Financial Metrics:
* Year-to-Date Performance (2025): Down roughly 14%
* 52-Week Range: 1.95 NOK to 3.61 NOK
* Market Capitalization: Approximately 4.1 billion NOK
* Shares Outstanding: 1.84 billion
* Liquid Assets: 1.76 billion NOK

The current share price sits well below its annual peak of 3.61 NOK, coming just months after hitting a low of 1.95 NOK. This volatility underscores broader market hesitancy and delayed investment decisions within the green hydrogen sector.

A major development occurred on December 12, when Nel's board approved the final investment decision to industrialize its "Next Generation Pressurized Alkaline" platform at its Herøya facility in Norway. This move concludes a seven-year development program and paves the way for establishing up to 1 GW of production capacity.

The project is supported by substantial funding:
* EU Innovation Fund: A grant of up to 135 million EUR
* Initial Disbursement: Over 10 million EUR expected
* Nel's Equity Contribution: Roughly 300 million NOK (prior to external financing)
* Targeted Commercial Start: First half of 2026
* Volume Delivery Goal: From 2027 onward

CEO Håkon Volldal emphasized that the new platform is designed to deliver leading system efficiency and significantly lower levelized cost of hydrogen (LCOH). This improvement could make business models economically viable that have previously relied heavily on subsidies.

Third-Quarter 2025: Revenue Challenges Offset by Improved Margins

The quarterly report for Q3 2025, released on October 29, presented mixed results. Revenue from contracts with customers fell 17% year-over-year to 303 million NOK. Total revenue, which includes other income, decreased from 391 million NOK to 349 million NOK.

On a positive note, earnings showed improvement. EBITDA improved markedly from -90 million NOK to -37 million NOK. This enhancement is a direct result of ongoing cost-reduction initiatives, including workforce reductions and the temporary halt of alkaline production at Herøya.

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

However, the order backlog remains a concern. It stands at 984 million NOK, a 47% decrease compared to the previous year, signaling limited revenue visibility in the medium term.

Order Flow Recovers Following Summer Slowdown

After a period of subdued order intake in the third quarter, Nel announced several new contracts in subsequent months:
* October 2025: A third order for a containerized PEM solution from H2 Energy.
* November 2025: A technology partnership agreement for GreenH hydrogen projects in Kristiansund and Slagentangen.
* November 2025: A PEM electrolyzer order for the HyFuel and Kaupanes projects, valued at over 50 million USD.

These new projects, encompassing both PEM and Alkaline technologies, serve to broaden the company's project pipeline both technologically and geographically.

Strategic Partnership with Samsung Provides Financial Boost

A crucial event for the balance sheet was the strategic cooperation agreement with Samsung Engineering & Construction, finalized in March 2025. The transaction injected 353 million NOK of fresh capital into Nel.

This investment made Samsung the company's largest shareholder. Beyond strengthening the finances, the partnership is expected to provide access to major international engineering and infrastructure projects where Nel's technology can be deployed.

Divergent Analyst Views and the 2026 Outlook

The average analyst price target currently sits near 2.28 NOK, close to the present trading level. However, the range of estimates is wide, spanning from 1.20 NOK to 4.20 NOK, reflecting significant uncertainty regarding the future development of the hydrogen market.

Two critical factors will shape the outlook for 2026:
1. The successful commercial launch of the new pressurized alkaline platform at Herøya.
2. The ability to convert the existing project pipeline into profitable revenue.

Should Nel succeed on both fronts, the current share price may be viewed as a transitional phase. A failure to deliver operational progress, however, increases the risk of further price declines.