Nel ASA Shares: Can Major Contracts Fuel a Sustained Recovery?

Norwegian hydrogen technology firm Nel ASA is experiencing significant market volatility despite announcing substantial new business. The company's shares declined by more than 6% to approximately €0.20, giving back some gains from their recent rally that saw prices advance from €0.18 to above €0.22.

Beyond the major November 6 announcement, Nel revealed another significant development just four days later. The company entered a strategic collaboration with GreenH AS for a minimum of 20 MW of electrolyzer capacity across two locations. GreenH specializes in developing hydrogen-based production facilities powered by renewable energy, making it an ideal partner for Nel's technology expertise.

However, these positive developments contrast with analyst concerns. According to Simply Wall St., revenue projections have been substantially reduced, with ten market experts now anticipating just 1.0 billion kroner for 2026—representing a 3.2% decrease compared to previous expectations. Loss per share forecasts have also been revised upward to 0.25 kroner.

Substantial Government Backing for Major Projects

The company's recent contract achievements include what it describes as the second-largest order in its history. On November 6, Nel announced a deal exceeding $50 million to supply PEM electrolyzers to Norwegian projects HyFuel and Kaupanes. This 40 MW capacity order represents the largest single contract ever secured by Nel's PEM division.

Both projects benefit from considerable government support, with HyFuel securing 180 million kroner from Enova and Kaupanes obtaining an even larger 206 million kroner in funding. Delivery of the systems is scheduled to begin in the second half of 2026, with operational commencement targeted for early 2028.

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

Mixed Signals in Financial Performance and Insider Activity

Recent quarterly results presented a contrasting picture:
* Revenue of 303 million kroner represented a 17% year-over-year decline but a 74% sequential improvement
* EBITDA showed improvement at negative 37 million kroner compared to negative 90 million kroner previously
* Third-quarter order intake reached 57 million kronen
* The order backlog stood at 984 million kroner

In a vote of confidence, board member Hans Hide purchased 10,000 shares at 2.44 kroner, bringing his direct holdings to 40,000 shares plus 600,000 options. This insider buying activity suggests confidence in the company's future prospects.

With a market capitalization around 5 billion kroner and continued high volatility, Nel remains a contentious player in the hydrogen sector. While the shares have gained 27% over the past year, they remain essentially flat year-to-date.

The critical question facing investors is whether these substantial contracts can reverse the downward trend in revenue forecasts. CEO Håkon Volldal has characterized the recent orders as "an important milestone following a period of weaker order intake," suggesting the company may be turning a corner.