Why Nel Bears Were Right Before The Fall

If you had watched Nel rally on upbeat electrolyzer headlines in August 2025 and decided to stand aside, the next twelve months might look different today. Investors who held Nel over the past year are down 20.4%, including dividends. That outcome now sits alongside fresh figures showing weaker net margin and deeper losses. The real question is which warning in the 2025 bullish and bearish assumptions could have prompted a closer look before buying.

If the move has made Nel harder to judge, start where the gap is still open and scan 186 high quality undervalued stocks.

The Two Nel Narratives Investors Had To Weigh

The shares cost NOK2.52 at the start of the period, and anyone looking at Nel then had to decide which story sounded more plausible.

The bullish narrative pointed to a Fair Value of NOK4.07, a price implied by expectations that revenue would rise 29.1% a year with profit margin reaching 5.2% and supporting a future P/E of 92.4x.

The bearish view anchored on a Fair Value of NOK1.2 and assumed slower 10.6% annual revenue growth, with concerns around order delays, cancellations, and unpredictable demand weighing on the outlook.

What The Results Changed For Nel

The clearest new fact for Nel investors was the Q2 2026 report. Revenue moved from NOK173.917 million in Q2 2025 to NOK153.407 million in Q2 2026, while the loss deepened and net margin slipped from 75.2% below zero to 122.9% below zero. That picture challenged both the bullish profitability assumptions and the more cautious case that still pencilled in a 5.2% margin.

The central assumption here was margin repair. When you assess another stock with an earnings story, compare the forecast profit percentage to the reported net margin each year and see whether the gap is actually closing.

What You Would Be Paying For In Nel Today

Nel now trades at NOK1.99, with the selected bullish Narrative suggesting a Fair Value that sits above that price based on its own assumptions rather than objective truth. The argument leans heavily on green hydrogen demand, policy support, and Nel’s technology and cost-cutting efforts.

Before treating the 20.4% decline over the past year as a potential opening rather than a red flag, a buyer today would need to believe that delayed customer investments and regulatory uncertainties ease in time for Nel’s new electrolyser platform and leaner cost base to translate into steadier orders and meaningfully better margins.

"Nel's ongoing R&D and introduction of next-generation electrolyser solutions, specifically its pressurized alkaline system and the new PEM stack, are described as significantly cutting customer CapEx and OpEx, improving project economics and margins. These technology developments are also presented as enhancing Nel's competitiveness and pricing power."

One Narrative disagrees with today's price. → See where this Narrative says Nel should trade

Find Your Own Contrarian Opportunity

The next headline does not have to be where your research begins. Go straight to the companies and see whether a contrarian opportunity could be taking shape.

• Company 1 - 47% below our estimate - expands long-duration public programs and modular housing to deepen technical services.
• Company 2 - 22% below our estimate - grows a unified security platform that integrates AI across endpoints and cloud.
• Company 3 - 35% below our estimate - wins offshore subsea work using a capital-light model to speed tiebacks.

That is three of the list. See the full list of 207 financially solid companies →

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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