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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 Q3 2025 Results: A Step in the Right Direction

Nel's revenue from contracts with customers came in at NOK 303 million, a 17% decrease year-over-year but a significant 74% increase quarter-over-quarter. The company's EBITDA loss narrowed to NOK 37 million, an improvement from the NOK 90 million loss in the same period last year. The actual EPS came out at '-0.05033', worse than estimates of '-0.015'. The order backlog stands at NOK 984 million, with a split of NOK 600 million for alkaline and NOK 400 million for PEM. Analysts estimate revenue growth of 10.9% for next year.

Publication Date: Nov -04

📋 Highlights
  • Revenue & EBITDA Trends:: Q3 revenue NOK 303M (-17% YoY, +74% QoQ); EBITDA improved to -NOK 37M from -NOK 90M YoY.
  • Order Backlog Composition:: Total NOK 984M backlog (NOK 600M alkaline, NOK 400M PEM) with delayed FID timelines.
  • Next-Gen Alkaline System:: 80% smaller footprint and 60% lower CapEx, targeting 2026 launch and 2027 scale-up.
  • Cost Efficiency Measures:: Staff reduced from 430 to 354, cash reserves at NOK 1.8B with declining burn rate.
  • Strategic Partnerships:: Reliance’s 1GW India factory, Samsung/Saipem for turnkey solutions, and GM’s PEM joint development.

Operational Highlights

The company is making significant strides in its R&D efforts, particularly with its next-generation pressurized alkaline system, which promises to reduce footprint by up to 80% and total system CapEx by up to 60%. As Hakon Volldal, CEO of Nel, highlighted, this system is expected to be commercially launched in 2026 and delivered at scale in 2027. The company is also investing in PEM technology, with a joint development agreement with General Motors.

Cash Position and Expenses

Nel has a cash reserve of NOK 1.8 billion and is taking steps to reduce its cash burn rate by decreasing staffing from 430 to 354 employees. The company's CFO, Kjell Christian Bjornsen, mentioned that the risk figure has been unchanged for some time, but believes that the worst is behind them as they have delivered a significant portion of the backlog.

Valuation Metrics

With a P/S Ratio of 3.68 and an EV/EBITDA of -11.76, the market is pricing in significant growth for Nel. The company's ROE and ROIC are both negative, at -9.85% and -11.09% respectively, indicating that the company is still in investment mode. The Net Debt / EBITDA ratio is high at 8.21, but this is not unusual for a growth company.

Regulatory Environment

Nel is advocating for more flexibility in EU regulations regarding hydrogen production solutions, particularly in sourcing energy, grid connections, and selling surplus energy back to the grid. The company believes that the current legislative framework is strict and hinders the development of hydrogen production solutions.

Outlook

The company is cautiously optimistic about equipment orders in the coming quarters, with opportunities having higher quality and coming from reputable companies. Nel expects to provide a more detailed update on its technology plans for the pressurized alkaline and next-generation PEM in February. With a large and increasing commercial pipeline, Nel is well-positioned for growth, albeit with some delay in final investment decisions.

3. NewsRoom

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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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Nel ASA: Signs collaboration agreement and conducts private placement with SAMSUNG E&A

Mar -11

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Nel ASA: Receives purchase order for 5 MW of containerized PEM electrolysers

Jan -21

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Nel ASA: Additional USD 29 million in tax credits for manufacturing expansion in Michigan

Jan -13

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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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ITM Power

A-Score: 4.0/10

Value: 6.8

Growth: 5.8

Quality: 2.7

Yield: 0.0

Momentum: 8.5

Volatility: 0.0

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Koenig & Bauer

A-Score: 3.7/10

Value: 6.2

Growth: 2.7

Quality: 1.4

Yield: 0.0

Momentum: 9.5

Volatility: 2.7

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Waga Energy

A-Score: 3.7/10

Value: 6.4

Growth: 3.6

Quality: 3.2

Yield: 0.0

Momentum: 8.0

Volatility: 1.0

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LPKF Laser & Electronics

A-Score: 3.0/10

Value: 6.4

Growth: 2.7

Quality: 3.3

Yield: 0.0

Momentum: 1.5

Volatility: 4.3

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Nel

A-Score: 2.9/10

Value: 8.0

Growth: 5.6

Quality: 3.1

Yield: 0.0

Momentum: 0.5

Volatility: 0.3

1-Year Total Return ->

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Kornit Digital

A-Score: 2.6/10

Value: 6.7

Growth: 3.2

Quality: 3.9

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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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

2.32$

Current Price

2.32$

Potential

-0.00%

Expected Cash-Flows