Bearish: Christopher Rouen
With 86% growth ITM power supply (London Stock Exchange: ITM) The stock price in the past year, the company clearly has a lot of long positions. In fact, since the beginning of last year, the stock price has been close to six bags. That kind of return on investment is a dream thing.
But the rapid rise in prices may also indicate that the stock price has been ahead of the company’s fundamentals. I think ITM’s technology is very promising. Although the base is low, sales are clearly rising. So I think it may be very successful as a company in the end. But this is different from the meaning that considering the current ITM Power stock price, this is a potential return investment for me as a private shareholder. The market value of this often loss-making company is £2.6 billion. Last year its revenue was only 4.3 million pounds. Its after-tax loss is more than six times that of it.
In order to fund the new factory, the company once again raised funds by diluting existing shareholders. ITM Power’s outstanding shares are now 613 million shares. Five years ago, it was 217 million shares. If loss-making companies continue to need capital for expansion, I think the risk of further diluting shareholders is obvious. At the same time, the company’s business record is too small, and I cannot assess whether it will eventually become a winner in the hydrogen field. This is why I think stocks are closer to speculation than investment. I am an investor and not a speculator, so I will not buy ITM Power stocks for my portfolio.
Christopher Ruane has no position in any of the stocks mentioned.
Bullish: James Reynolds
The biggest advantage of ITM Power is that it already has products. Modular electrolysis machine.
Electrolyzers allow energy producers to use electricity to spit out oxygen and hydrogen from water without releasing any other chemical by-products.
ITM’s modular electrolyzers are compact and easy to transport, and are now available on the market. Most importantly, they can be integrated with existing energy infrastructure. All a company has to do is to connect the electrolyzer to its wind or solar power plant, and then “boom” and they can start producing hydrogen fuel.
This is the same as shell with BP They have promised to invest in hydrogen technology for many years, but so far it has produced almost no results. Most importantly, their goal is to produce blue hydrogen-which relies on carbon capture technology that does not currently exist.
ITM is completely ahead. The products it provides do not rely on the development of new technologies to solve our energy needs today.
Hydrogen can be used to power trucks and cars, but it can also heat our houses.
The company may have more debt than revenue at this time, but it recently raised 250 million pounds to help expand its production from 1GW to 5GW. Its stock price fell because it sold its shares at a discount to attract investment. I think this is a great buying opportunity to enter the technology that will shape the future, and I will add ITM to my portfolio.
James Reynolds has no position in any of the aforementioned stocks.
The Motley Fool UK has no position in any of the aforementioned stocks. The views expressed by the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we made in subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account a variety of different insights, We are better investors.