Diverging Views on Ballard Power’s Growth Trajectory

Ballard Power Systems delivered a robust operational performance in the third quarter of 2025, marked by a doubling of revenue and significant cost reductions. Despite these strong results, a clear consensus on the stock's future is absent among market analysts, with debate centering on the sufficiency of the company's order backlog to fuel long-term expansion.

A notable strategic reversal was announced concerning the company's planned manufacturing expansion. The previously proposed gigafactory in Texas will no longer be pursued. This decision was attributed to shifts in U.S. federal incentive programs and a reassessment that current production capacity is adequate for near-term needs.

Financially, the company remains on solid footing. Ballard Power closed the quarter with a strong liquidity position of $525.7 million and carries no bank debt, providing considerable financial flexibility. Management has reaffirmed its full-year 2025 guidance, noting that revenue is expected to be heavily weighted toward the second half of the year. The overarching corporate focus remains on achieving positive cash flow by the end of 2027.

Analyst Ratings: A Spectrum of Opinions

In response to the Q3 results, several financial institutions revised their price targets, yet their investment ratings reveal a cautious stance.

Should investors sell immediately? Or is it worth buying Ballard Power?

• HSBC increased its target to $3.40 from $2.00 but maintains a "Hold" recommendation.
• Roth Capital raised its target to $3.00 from $1.80, keeping a "Neutral" rating.
• TD Cowen, while lifting its target from $1.00 to $2.50, continues to advise investors to "Sell" the shares.

These adjustments follow a quarter of substantial operational improvement. Revenue surged by 120% year-over-year to $32.5 million. The gross margin expanded dramatically to 15%, representing an increase of 71 percentage points. Restructuring efforts bore fruit, with operational cash costs declining by 40% and total expenses falling 36%.

The Backlog Debate: A Point of Contention

The primary area of analyst concern lies in the company's order book. While the total backlog stands at $132.8 million, the 12-month component was $71.6 million at the end of Q3. Analysts point to weaker order intake and a shrinking near-term backlog as potential headwinds.

TD Cowen analyst Jeff Osborne highlighted concerns over the pace of new orders. Roth Capital similarly noted that delayed orders could impact valuation, suggesting visibility into sustainable growth remains limited. Conversely, HSBC pointed to a potentially improving macro environment for clean technology in the U.S., where falling interest rates and more realistic growth assumptions could benefit the sector.

According to analyst consensus, the fair value estimate for Ballard Power shares is approximately 1.75 Canadian dollars. The path to sustained growth, however, is seen as dependent on the successful execution of announced cost reductions and a strengthening pipeline of new orders.