The· ITM power (LSE: ITM) Stock prices fell about 30% last week alone. This popular hydrogen energy inventory is still up 120% compared to last year, but the rapid sellout of ITM has given me a new perspective.
ITM has already formed partnerships with several major industries, including: Royal Dutch shell, Linde,and Snam.. These deals suggest to me that the company’s technology may have serious potential. Do I need to buy a portfolio because ITM’s stock price has fallen?
ITM Power’s share price has fallen 50% from its all-time high of 724p in late January. When you see a stock price fall so quickly, first find out why.
The first big drop was when the company announced half-year accounting. January 28.. I took a look at this report again. We have a lot of good news, but we’ll be back soon.
The bad news was that Covid-19 restrictions delayed the completion of work on the customer site. As a result, revenue fell 92% to £ 200,000. Without these restrictions, CEO Graham Cooley said revenue would have been £ 3.1 million higher.
Personally, I don’t really care. These delays are expected to reverse over time. Unless ITM Power misses new opportunities as a result of these delays, I don’t think half a year’s performance is that important.
ITM: Order backlog is increasing
ITM wants to be able to sell Modular hydrogen electrolyzer system This will allow customers to build refueling facilities quickly and easily. Demand for the company’s units is increasing.
Six months later, ITM’s contract backlog was £ 36m on October 31, up from £ 16m a year ago. The company also reported an additional £ 88m of work if advanced negotiations or ITM were the preferred supplier.
Since January, ITM has also reported new deals with the Japanese group Scottish Power. Sumitomo, And a planned extension of the project using Shell.
As far as I can see, ITM still has strong operational momentum. When the company’s new plant is completed at Bessemar Park, it will support capacity expansion as needed.
ITM Stock: My Decision
The pandemic has hurt ITM’s performance, but as far as I can see, the group is still making good operational progress. I’m not an expert in the field of hydrogen, but I think this business can be a long-term success.
The broker predicts that the business will remain in the red until 2023, but ITM raised £ 172m from investors last November. For now, financing looks safe to me.
But there is still one danger signal that prevents me from investing. ITM’s share price has fallen, but it still seems too high for me. The business is currently valued at £ 2.29 billion, while revenue is expected to be only £ 30 million in 2022.
In my opinion, the ITM rating has already been priced in the course of many years of successful expansion. I am reluctant to make so many upfronts for future growth. For this reason, I haven’t purchased it.
Roland Head I own a stake in Royal Dutch Shell B. MotleyFoolUK does not have a position in any of the listed shares. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by exploring different insights, Better investors than us.
ITM Power’s share price is down 30%. Should I buy it now?
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