ITM Power spent much of early 2026 talking about concrete factory metrics, including higher Factory Acceptance Test pass rates, rather than splashy new contracts. For ITM Power shareholders, the return from the start of the year was 49.1%, including dividends. If you were weighing a purchase back on 1 January, you had to decide whether record backlog, ambitious margin targets and a still loss-making income statement could sit together. What exactly did buyers think would break in their favour?
The easy part of this move is behind ITM Power. Zero in on 8 high quality undervalued stocks for companies trading below our estimates.
The Two Stories ITM Power Investors Were Arguing About
The shares cost £0.62 at the start of the period, and anyone looking at ITM Power then had to choose between two very different stories about what came next.
The bullish narrative pointed to a Fair Value of £0.94, a price implied by assumptions that government hydrogen spending and factory automation would support revenue rising 54.6% a year and profit margins eventually reaching 5.8%.
The bearish view anchored on a Fair Value of £0.4, based on concerns that tighter financing conditions, policy risk and geopolitical friction could restrict project funding even if revenue grew 54.1% and margins also reached 5.8%.
What The Results Changed For ITM Power
The clearest new fact for ITM Power investors was the H1 2026 report. Revenue was £18.026m, compared with £15.534m in H1 2025, and the loss narrowed from £28.86m to £14.16m as net margin moved from a loss of 185.8% to a loss of 78.6%. That shift supported the efficiency story, but profitability remained unproven, which kept the cautious case alive.
The key lesson is simple. When a pitch leans on future margin repair, watch the net margin line and the absolute loss side by side to see if both are moving in the same direction.
What ITM Power's Run Leaves You Paying For Today
ITM Power now trades at £0.95, with this selected Narrative arguing that its Fair Value sits above the current price rather than at or below it.
The Narrative leans on policy support, technology platforms and recurring contracts, and it implies today's price still does not fully credit sustained high factory utilisation and margin repair under that model.
"Manufacturing automation, cost discipline, and improvements in production processes (e.g., Factory Acceptance Test pass rate to 99%) are reducing operational inefficiencies and unit costs, supporting gross margin expansion and accelerating the group's path to net profitability. The launch of Hydropulse's build-own-operate model widens ITM's addressable market and offers stable, recurring revenues through long-term offtake agreements, improving both factory utilization and earnings predictability in a fast-growing, decarbonization-driven industry."
One Narrative disagrees with today's price. → See where this Narrative says ITM Power should trade
Which Company Could Surprise You Next?
The story behind this run has already been told. The next one could be taking shape somewhere else. Where could you start looking before it becomes the headline?
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Company 1 - 24% below our estimate - captures experienced lawyers leaving traditional partnerships for a tech enabled, dispersed fee sharing structure.
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Company 2 - 19% below our estimate - adds automated manufacturing capacity so distributors can push everyday supplements into new markets faster.
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Company 3 - 35% below our estimate - raises infrastructure and private equity funds into regions where it holds low single digit shares.
Three companies from the same screener. Open the full list of 9 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.
Companies discussed in this article include ITM.aim .
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