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1. Company Snapshot

1.a. Company Description

Nel ASA, a hydrogen company, delivers various solutions to produce, store, and distribute hydrogen from renewable energy in Norway, the United States, Denmark, and South Korea.The company operates in two segments, Nel Hydrogen Fueling and Nel Hydrogen Electrolyser.The Nel Hydrogen Fueling segment produces H2Station hydrogen fueling stations that provide fuel cell electric vehicles with the fueling and long range as conventional fossil fuel vehicles, including cars, buses, trucks, forklifts, and other applications.


The Nel Hydrogen Electrolyser segment produces and installs electrolysers for hydrogen production based on alkaline and proton exchange membrane water electrolyser technology.It serves industry, energy, and gas companies.The company was formerly known as DiaGenic ASA and changed its name to Nel ASA in October 2014.


Nel ASA was founded in 1927 and is headquartered in Oslo, Norway.

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1.b. Last Insights on NEL

Nel ASA's recent challenges are driven by the lack of significant revenue growth, despite recent purchase orders and tax credits. The company's reliance on a few large contracts, such as the 10 MW order from Samsung C&T, may not be sustainable in the long term. Additionally, the company's manufacturing expansion in Michigan, although supported by tax credits, may face delays or cost overruns, which could impact profitability. Furthermore, the company's product mix, with a focus on alkaline electrolyser equipment, may not be as lucrative as other hydrogen production technologies.

1.c. Company Highlights

2. Nel's Q4 2025 Earnings: A Step Forward with New Technology

Nel's Q4 2025 revenue from contracts with customers reached NOK 330 million, marking a 9% quarter-on-quarter increase but a 20% year-on-year decline. EBITDA remained flat versus last year and quarter-on-quarter, while the EBIT loss was significant at NOK 920 million, largely due to approximately NOK 800 million in impairment losses. Earnings per share (EPS) came in at -0.47353, missing estimates of -0.06952. The company's cash burn rate has been reduced by 35% in 2024 and 41% in 2025, indicating a controlled burn rate going forward.

Publication Date: Mar -09

📋 Highlights
  • Revenue Decline Despite QoQ Growth:: Q4 revenue reached NOK 330 million, up 9% quarter-on-quarter but down 20% year-on-year.
  • EBITDA Flat Amid Impairments:: EBITDA remained unchanged year-on-year and quarter-on-quarter, with an EBIT loss of NOK 920 million driven by NOK 800 million in impairment charges.
  • Order Intake Progress:: Order intake improved from NOK 977 million in 2024 but remained below 2022 levels, with PEM technology dominating the intake.
  • Cash Burn Reduction:: Cash burn rate decreased by 35% in 2024 and 41% in 2025, reflecting improved financial control.
  • New Technology Impairments:: Impairments of NOK 361 million and NOK 439 million were recorded due to reduced demand for older products from the new pressurized alkaline platform.

Operational Highlights

The company took a final investment decision on industrializing the Next Generation Pressurized Alkaline platform, a move that is expected to drive future growth. Order intake accumulated in line with previous years, below 2022 levels, but represented a significant step forward from NOK 977 million in 2024, with most of the order intake coming from the PEM side. Nel has developed a new technology that it believes will be superior to its existing platforms, leading to reduced demand for its old products and resulting in impairments.

New Technology and Future Prospects

Nel's new generation of alkaline electrolyzers is expected to set new industry benchmarks with a compact design and reduced system footprint, aiming to bring the total system cost down by 40% to 60% and improve energy consumption for generating hydrogen. The company's outdoor pressurized alkaline electrolyzer technology can operate in harsh climates, avoiding costly safety regulations and building requirements, thus reducing construction and commissioning costs. The Board of Directors has approved the construction of a 1-gigawatt stack production capacity at Heroya, with plans to launch the product commercially in the first half of 2026.

Valuation and Outlook

Analysts estimate next year's revenue growth at 62.9%. The current P/S Ratio of 3.95 and EV/EBITDA of -13.09 indicate that the market is pricing in significant growth prospects. With an ROE of -27.1% and ROIC of -31.45%, the company's current profitability is a concern. However, with the new technology and expected reduction in total system costs, Nel is poised for growth. The company's Net Debt / EBITDA ratio of 5.98 is a concern, but the EUR 135 million in grants from the European Union for industrializing its concept provides some relief.

Conclusion on Competitive Positioning

Nel believes its pressurized alkaline technology is competitive on the hardware cost side and significantly better on the labor cost side. While Chinese electrolyzers may have lower production costs, Nel can beat them on the OpEx side. The company expects to sell both its old and new technologies, with a focus on reducing costs and improving efficiency. With a strong order backlog and a clear plan for reducing inventory, Nel is well-positioned for future growth.

3. NewsRoom

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NEL ASA (NLLSF) Q4 2025 Earnings Call Highlights: Navigating Challenges with Strategic Innovations

Feb -28

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What Catalysts Are Recasting The Nel (OB:NEL) Narrative Around Fair Value And Risk

Jan -18

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Nel ASA: Strengthens its industry leadership as the final investment decision has been taken to industrialize the Next-Generation Pressurized Alkaline platform

Dec -12

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Nel ASA: Technology provider for GreenH hydrogen projects in Kristiansund and Slagentangen

Nov -10

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Nel ASA: Receives PEM purchase order from the HyFuel and Kaupanes hydrogen projects valued at more than USD 50 million

Nov -05

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Nel ASA: Receives its third purchase order for a containerized PEM solution from H2 Energy

Oct -07

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[Latest] Global Green Gas Market Size/Share Worth USD 2.81 Billion by 2034 at a 6.20% CAGR: Custom Market Insights (Analysis, Outlook, Leaders, Report, Trends, Forecast, Segmentation, Growth Rate, Value, SWOT Analysis)

Aug -19

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Nel ASA: Receives purchase order for one MC500 containerized PEM electrolyser

Mar -20

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.23%)

6. Segments

Electrolyser

Expected Growth: 13.93%

Nel ASA's electrolyser growth is driven by increasing demand for green hydrogen, government incentives for renewable energy, and declining production costs. The company's technology advancements, strategic partnerships, and expanding production capacity also contribute to its growth. Additionally, the rising adoption of fuel cell electric vehicles and growing investment in hydrogen infrastructure further boost demand for Nel ASA's electrolysers.

Fueling

Expected Growth: 15.43%

Nel ASA's 15.43% growth is driven by increasing adoption of hydrogen fuel cell technology, government incentives for clean energy, and rising demand for low-carbon transportation solutions. Additionally, Nel ASA's strategic partnerships and expanding production capacity are contributing to its growth momentum.

7. Detailed Products

Alkaline Electrolyzers

Nel ASA's alkaline electrolyzers are designed for the production of hydrogen gas through the electrolysis of water. They are suitable for industrial and commercial applications.

Proton Exchange Membrane (PEM) Electrolyzers

Nel ASA's PEM electrolyzers are compact and efficient systems for the production of high-purity hydrogen gas. They are suitable for industrial, commercial, and transportation applications.

Alkaline Fuel Cells

Nel ASA's alkaline fuel cells are designed for the efficient conversion of chemical energy into electrical energy. They are suitable for stationary power applications.

Hydrogen Fueling Stations

Nel ASA's hydrogen fueling stations are designed for the safe and efficient dispensing of hydrogen fuel to vehicles. They are suitable for commercial and industrial applications.

Hydrogen Production Systems

Nel ASA's hydrogen production systems are designed for the efficient production of hydrogen gas through the electrolysis of water. They are suitable for industrial and commercial applications.

Electrolysis Stacks

Nel ASA's electrolysis stacks are designed for the efficient production of hydrogen gas through the electrolysis of water. They are suitable for industrial and commercial applications.

8. Nel ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Nel ASA operates in the renewable energy industry, which has a moderate threat of substitutes. While there are alternative energy sources, such as fossil fuels, the increasing demand for renewable energy reduces the threat of substitutes.

Bargaining Power Of Customers

Nel ASA's customers are primarily large corporations and governments, which have limited bargaining power due to the specialized nature of the company's products and services.

Bargaining Power Of Suppliers

Nel ASA relies on a few key suppliers for critical components, which gives them some bargaining power. However, the company's strong relationships with suppliers and its ability to negotiate contracts mitigate this risk.

Threat Of New Entrants

The renewable energy industry has high barriers to entry, including significant capital requirements and regulatory hurdles, which reduces the threat of new entrants.

Intensity Of Rivalry

The renewable energy industry is highly competitive, with many established players and new entrants vying for market share. Nel ASA faces intense competition from companies such as Hydrogenics and Ballard Power Systems.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.97%
Debt Cost 9.72%
Equity Weight 99.03%
Equity Cost 9.72%
WACC 9.72%
Leverage 0.98%

11. Quality Control: Nel ASA passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Waga Energy

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Growth: 3.6

Quality: 3.2

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Momentum: 9.0

Volatility: 4.0

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Nel

A-Score: 3.2/10

Value: 8.0

Growth: 5.6

Quality: 2.8

Yield: 0.0

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Quality: 3.3

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Kornit Digital

A-Score: 2.5/10

Value: 6.6

Growth: 3.2

Quality: 4.0

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.09$

Current Price

2.09$

Potential

-0.00%

Expected Cash-Flows