ITM Power Plc designs, manufactures, and sells hydrogen energy systems for energy storage, transportation, and industrial sectors in the United Kingdom, Germany, rest of Europe, and the United States. It offers HGas for power-to-gas, clean fuel, and industrial hydrogen applications. The company is also involved in the development and manufacture of prototype products; and sale of electrolysis equipment and hydrogen storage solutions. ITM Power Plc was founded in 2001 and is headquartered in Sheffield, the United Kingdom.

ITM Power Plc

Industrials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

IJ8.DE reported revenue of GBP 17mn in the last 12 months, up 16% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 43% from FY23 to GBP -0.04.

Over the past six months, the stock has consistently climbed, resulting in 128% total increase. When compared to its international counterparts in the same sector and industry (as shown above), the stock has exceeded their performances, leading by 125ppts in total. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.1 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

IJ8.DE has very poor trading liquidity. It will take several trading days for the average private investor to sell a common position under normal market conditions. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, negligible return on capital, weak debt servicing capacity, inadequate interest coverage, and poor cash flow generation. We note resilient historical revenue growth, low margin volatility, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, IJ8.DE is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, IJ8.DE is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is slightly overvalued relative to its peers. 

ITM Power Plc

€ 0.9

2

ITM Power Plc

€ 0.9

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 0.9

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