All it could take is £500 a month, a good investing strategy, and a bit of patience. Here’s how.

The mistake many make

It may be tempting for new ISA investors to chase the most popular and fastest-growing shares on the market. After all, who doesn’t love the idea of getting rich quick, especially when everyone else seems to be making loads of money?

This fear of missing out (FOMO) is the most common trap investors can fall into. And even experienced professionals can end up getting caught out by it. Perhaps a perfect recent example of this in action is hydrogen-related stocks in 2020.

With the pandemic giving way to a ‘green recovery’ narrative supported by the government’s UK Hydrogen Strategy and Europe’s EU Green Deal, hydrogen stocks were all the rage. And ITM Power (LSE:ITM) in particular saw its market cap explode by roughly 2,440% between January 2019 and 2021 as customer orders came flooding in.

Just to put this into perspective, this momentum would have transformed £1,000 into £25,400 in the space of just two years!

But while everyone was getting swept up by FOMO, most were overlooking what now seems obvious – ITM Power didn’t have the infrastructure or scale to actually deliver customer orders on time. What followed was a complete and utter collapse of the share price that’s still down 90% from its 2021 peak.

A better approach

Rather than looking at what’s popular, a better strategy is often to look for businesses that are unpopular. Why? Because, while the market’s distracted by the next shiny new thing, potentially fantastic companies can be overlooked, allowing investors to buy top-notch stocks at attractive prices.

With that in mind, let’s take a look at ITM Power again.

At around 65p, the hydrogen stock is still nowhere near its 2021 peak levels. Yet while most investors have lost interest in this space, this business has recently made some substantial progress. Its order book has been restructured, and the product portfolio simplified. And subsequently, orders are finally being fulfilled.

2025 delivered record sales, while losses are steadily shrinking as older, lower-margin contracts are phased out and replaced by new, more profitable deals. Looking ahead to 2026, revenue’s expected to reach yet another record high of up to £40m, with losses shrinking even further.

ITM Power stock is still trading at a lofty valuation even after its collapse. The difference is, this time, it’s nowhere near as extreme and it’s actually got fundamentals backing it up. That’s why it could be worth a deeper dive today.

The bottom line

Throughout the history of the stock market, quality at a reasonable price has almost always trumped hype and FOMO over the long term. And even if a portfolio only musters a 10% annualised return, consistently investing £500 a month at this slightly higher than average rate will grow an ISA beyond the £1m threshold in roughly 29 years when starting from scratch.

The post How to invest £500 a month in an ISA to aim for a million appeared first on The Motley Fool UK.

The hydrogen stock is up just shy of 80% since January, transforming a £5,000 initial investment into a whopping £8,971.50.

But with industrial demand on the rise, could this be just the tip of the iceberg for investors? And if so, how much money could they make by this time next year?

ITM Power’s second wind

Back in 2021, when even unprofitable hydrogen stocks could do no wrong, ITM Power saw its share price skyrocket on excitement from over-eager investors. This valuation surge unsurprisingly reversed once investor expectations collided with reality.

Skip ahead to 2025, and this hydrogen business is once again marching upwards. But this time, it has the fundamentals backing it up.

Following its botched initial transition to commercial production, management streamlined the group’s electrolyser offerings, simplifying the order book and its supply chains. And with orders finally starting to be fulfilled, ITM’s revenue stream has been rapidly expanding.

In fact, following a recent trading update, sales are currently on track to reach as high as £40m by the end of its 2026 fiscal year (ending in April). That presents as 53% increase year on year, driven by a record order backlog that keeps growing, not because of delayed deliveries like in the past, but because of new profitable contracts from a growing list of clients.

What to watch

With ITM Power seemingly surpassing a critical inflexion point in its business, there’s a lot to be excited about moving forward. And looking at the latest analyst forecasts, it seems most institutional experts agree, with Berenberg Bank issuing a 100p price target and Jefferies upgrading its projection to as high as 115p.

That means a £5,000 investment today could grow to as much as £8,956 by this time next year. However, even with strong conviction from professionals, it’s important to recognise the risks surrounding this still-young enterprise.

Despite tremendous improvement in revenues and cash flows, ITM Power remains an unprofitable enterprise. And a big contributor is that around 40% of the group’s order book consists of legacy and largely unprofitable contracts.

As these are cleared out and the company scales its operations, margins should start to move in the right direction. And to be fair, there are already some early signs of this happening with losses for its 2026 fiscal year on track to reach £29m versus £33m a year ago.

Something else to keep an eye on is the evolving competitive landscape. Several green electrolysis companies have started to pop up both across Europe and Asia. And if rival innovation leads to cheaper or more efficient alternatives, ITM Power could find its order book drying up quickly.

The bottom line

Even at around 65p, the shares are not cheap. However, unlike in early 2021, the business today has both rapidly expanding cash flows and early signs of a path to profitability.

There’s no denying it will continue to be a volatile stock. But given the market opportunity in this burgeoning industry, even with a premium valuation, this hydrogen stock could be worth a closer look.

The post £5,000 invested in ITM Power shares at the start of 2025 is now worth… appeared first on The Motley Fool UK.

This all comes with the backdrop of an awful few years for the stock. Before this year’s run up, the shares had fallen by 96% in only four years. The current 71p share price looks like it might be cheap compared to the all-time high of 640p hit back in 2021. What’s going on here? And with a potentially huge role in a green future, is this a renewable energy stock that could surge long into the future?

Potential

The potential around ITM Power is its possible role as a key link in the Net Zero revolution. The firm produces hydrolysers, which in simple terms take energy like that from solar or wind and convert it into hydrogen. This hydrogen can be stored more cheaply or used for other purposes.

This kind of technology promises to be a game-changer for countries like the UK, which creates a lot of excess renewable energy. Britain spends hundreds of millions of pounds a year to turn off wind turbines. Hydrolysers could be one solution to that kind of waste.

This isn’t pie in the sky stuff either. ITM Power has been in existence since 2000 and its hydrolysers started being sold in 2010. The firm notably signed contracts to deliver two 100MW hydrolysers for a plant in Lingen, Germany. It’s also working on a deal with oil giant Shell.

Why has the stock been surging this year? It’s down to a string of orders, largely coming from Europe. Compare the firm’s revenue for financial years 2023 (£5m), 2024 (£17m) and 2025 (£26m). The next financial year is expected to come in at £40m too. This is incredible growth although it must be pointed out the firm still isn’t turning a profit.

The future

So what do we have here? An exciting stock with a compelling growth story and surging revenue, with the big caveat that it’s still pre-profit and trading at over 10 times sales. Stop me if you think you’ve heard this one before.

The reality is that ITM Power is still a highly speculative investment. The future of hydrolysers in green energy is extremely uncertain and pretty much no one can predict where they will be in 10 or 20 years.

As such, I’d class this as a high-risk, high-reward stock. I have a small part of my own portfolio in such investments. They can be big winners, and therefore I’d say ITM Power is worthy of consideration for those who understand the risks.

The post What on earth is going on with ITM Power shares? appeared first on The Motley Fool UK.

The chipmaker’s stock market gains — up roughly 22,700% in a decade — are legendary. And this has understandably sparked a lot of interest in finding the next Nvidia-type hidden gem.

That seems to be the hope of people on investing platform AJ Bell anyway. Because according to company-complied data, the most popular stock bought there in the past day (24 November) was ITM Power (LSE:ITM).

Trading at 72p and sporting a modest market cap of just £449m, this stock is certainly still under the radar of many investors today. But it’s now up nearly 200% since March, so excitement is building.

Might it be a giant company in the making?

Green hydrogen pioneer

ITM Power makes electrolysers — industrial machines that split water into hydrogen and oxygen using electricity. As we all learned in chemistry class, water is two parts hydrogen and one part oxygen (H₂O). 

Specifically, ITM builds the equipment needed to create green hydrogen, which can be used as a clean fuel for factories, trucks, steelmaking, chemical plants, and energy storage. Its NEPTUNE V units are the leading containerised product for mid-scale green hydrogen projects.

According to a 2020 report from Goldman Sachs, the global green hydrogen addressable market could potentially reach €10trn by 2050. That’s the year when many countries aim to achieve net zero.

Similar to Nvidia then, there’s a massive long-term potential growth opportunity ahead for ITM.

Sales are growing

After two decades in research and development mode, the company is finally starting to enjoy commercial success. In FY25, which ended in April, ITM’s revenue climbed over 50% to £26m.  

Meanwhile, the order backlog has risen to more than £145m, representing a year-on-year increase of almost 90%. And for the current year (FY26), management expects revenue to jump another 50% or so to £35m-£40m.

Looking further out, analysts see the top line reaching approximately £78m by FY27. So this is a company that is currently experiencing strong sales growth.

With market demand accelerating, a world-class product portfolio, and a proven track record of execution, along with strong reference plants, ITM is well-positioned to lead the green hydrogen industry into its next phase of growth. ITM Power.

Red ink

Now, whereas Nvidia is one of the most profitable firms on Earth, ITM is still loss-making. This year, it expects an adjusted EBITDA loss of £27m to £29m, as it continues “to fill our factory for increased cost-absorption and recognise revenue on the legacy loss-making portion of our contracted order backlog“.

This is the real risk here, as City analysts don’t see an end to the red ink for quite some time. Also, after its near-200% surge, the stock is trading expensively at approximately 10 times forward sales.

The next Nvidia?

Stepping back though, I don’t see the stock as having Nvidia-like potential. After all, building electrolysers is a capital-intensive business, whereas Nvidia is a capital-light chip designer (it outsources manufacturing to TSMC).

That said, ITM is an interesting growth stock that adventurous investors might want to check out at 72p. It’s still down 89% since 2021!

However, I’m currently looking at other lucrative opportunities in the stock market.

The post Is ITM Power stock the next Nvidia? appeared first on The Motley Fool UK.

What about the shares that have done well? The FTSE 100 index has hit new all-time highs in the first half of the year and is up about 6% so far in 2025. Some individual UK shares though, have done much, much better than that…

This share has surged

Take for example a share that is still a long way off the FTSE 100 average: ITM Power (LSE: ITM). Since the start of 2025, the renewable energy share is up by 123%.

Now, I take a long-term approach to investing and from a long-term perspective, ITM’s performance has been much less impressive. Indeed, the price of this UK share has fallen 71% over the past five years, even including this year’s strong performance to date.

Understanding the reasons for that can be helpful. For many years, ITM has had promising hydrogen energy technology. Over the past year, a far sharper commercial strategy has seen impressive shifts in its financial performance.

At the time of its first half results in January, revenues were up 74% year-on-year. Since then, it has raised its full-year guidance and announced a stream of impressive contract wins.

Hunting for future winners

The rapid share price rise makes me feel ITM currently offers me too little margin of safety. After all, it faces risks including a heavily reliance on a small number of clients and a business model that has not yet proven it can be profitable.

Still, it is one of the UK shares I think could do well in years to come. If the price hits a level where the risk-to-reward ratio feels appropriate for me, I will consider investing.

But ITM illustrates that some UK shares have done brilliantly so far this year. I expect some will also have a strong second half – and may perform well in years to come.

So what am I looking for? Whereas ITM is yet to prove it can be consistently profitable, my general preference is for companies that have. In short, to paraphrase Warren Buffett, I look for great companies selling at attractive prices.

One share I’ve been buying

That brings me to one of the UK shares I have bought in recent months: plant hire company Ashtead (LSE: AHT).

It plans to move its primary listing to the US, but will still trade on the London market. So far this year, Ashtead’s 12% share price decline puts it in the shade compared to the likes of ITM Power. Over five years though, it has grown 68%.

It is up an even more impressive 3,558% over the past decade. Few UK shares can come anywhere close to that sort of performance.

But past performance is not necessarily indicative of what may happen in future. An uncertain economic outlook in its key US market is a risk to Ashtead’s revenues and profits.

But I reckon Ashtead’s proven business model, large customer base and extensive base of well-stocked depots are all valuable advantages that make it worth considering.

The post Some UK shares have already doubled this year. I’m trying to find the next ones! appeared first on The Motley Fool UK.

A volatile stock

It’s been a while since I’ve covered ITM Power. The last time I looked at the green hydrogen company was in February 2024 when its share price was around 60p.

At the time, I was bearish on the stock due to a) the company’s lack of profitability and b) a high level of short interest (meaning hedge funds were betting against it). Being bearish back then was the right call in hindsight as the stock halved in value over the next year.

Several major contracts

Recently though, the share price has rebounded spectacularly. Today, it’s back near 80p.

This price action can be attributed to the signing of a few major contracts. One such contract (5 May) was with Westnetz GmbH, a German distribution system operator for electricity and gas. Here, ITM will supply a NEPTUNE V unit to the company. NEPTUNE V is its full-scope 5MW containerised green hydrogen plant.

Another contract (8 May) was with a ‘leading Spanish cement producer’. This will involve supplying a NEPTUNE II unit – its fully autonomous 2MW electrolyser system.

Additionally, ITM signed a contract (11 May) with a customer that wants to remain confidential. This will involve supplying over 300MW of electrolysers to produce green hydrogen for use in a power plant in the Asia-Pacific region.

A new director

One other thing worth mentioning is that on 8 June the company announced the appointment of Jürgen Nowicki as Non-Executive Chair of the Board, effective from 15 January 2026. Mr Nowicki previously served as CEO of Linde Engineering, so this is a big deal.

Where to from here?

What’s next for ITM Power shares? Are we looking at a multi-bagger from here?

Well, we could be. The number of contracts signed by the company recently is very encouraging.

If the company can continue to sign major contracts, we could be looking at significantly higher revenues in the years ahead. It’s worth noting that for the year ending 30 April 2026, analysts expect revenue to jump 145% to £56.3m.

I need to point out, however, that profitability could still be years away. Looking at analysts’ projections, the consensus forecast is for a net loss of £31m this financial year.

This lack of profitability could hold the stock back. It’s worth noting that one thing that really boosted Rolls-Royce shares was sharply higher profits (not revenues).

The valuation could also be an issue. Currently, ITM Power has a market cap of a little over £500m, meaning that the price-to-sales ratio is near nine (quite high).

I should also point out that green hydrogen is an emerging technology and ITM Power has a patchy track record when it comes to delivering for investors. So, there’s no guarantee that contracts will keep coming.

My view

Given the lack of profitability and high valuation, I won’t be buying. For me, it’s too risky.

However, it could be worth considering if an investor is seeking clean energy investments and has a high risk tolerance. It’s a speculative stock, but there does appear to be potential.

The post Could the ITM Power share price be set to soar like Rolls-Royce? appeared first on The Motley Fool UK.

However, despite what this volatile implies, the underlying company’s finally starting to deliver tangible results. Revenue in the first half of its 2025 fiscal year (ending in April) almost doubled, from £8.9m to £15.5m year-on-year. At the same time, adjusted earnings have also slightly improved from a loss of £18.1m to a loss of £16.8m.

Clearly, the firm has a long way to go. However, with more customer contracts signed and impressive technological advancements achieved, this could be the beginning of ITM Power’s long-awaited comeback.

Reducing costs through innovation

Thanks to its REFHYNE II project with Shell and two new contracts signed for its NEPTUNE V electrolyser with German customers, ITM Power’s order backlog has just hit a record high of £135m. And with the hydrogen market in Europe starting to heat up, management has already announced demand’s rising, hinting that the order book has much further to grow throughout the rest of 2025.

Encouragingly, the group’s investments in research & development are also paying dividends. In November, ITM Power announced that it had found a way to reduce the amount of iridium its electrolysers use by 40% without sacrificing performance or durability. Why does that matter?

The German Mineral Resources Agency expects demand for iridium to surge between now and 2040. But it’s actually one of the rarest metals on the planet. Due to the complexities involved in its extraction, supply’s currently not expected to keep up, resulting in a commodity that could increase in price significantly over the coming decades.

By reducing ITM’s reliance on this element for its technology, the business may have just saved itself an enormous amount of variable expenses in the long run. And while it may take some time for the bottom line to reach the black, this is yet another step closer to profitability.

What’s around the corner?

Opinions from institutional analysts are a bit mixed. Of the 17 analysts tracking the business, three still believe the stock has further to fall, giving it a Sell rating, seven remain uncertain with a Hold rating, while the remaining seven either have the stock rated as a Buy or Outperform.

However, in terms of a share price target for the next 12 months, it seems the average consensus is that ITM Power will reach 61.5p, with one analyst believing the shares could rise as high as 105p by this time next year. That means, in the best-case scenario, a £1,000 investment right now could be worth £3,486 by March 2026.

Of course, a lot of things have to go right for such an impressive return to materialise. Full-year guidance for the remainder of ITM Power’s 2025 fiscal year suggests the second half has slowed in terms of revenue and earnings. And the full-year underlying loss is actually on track to be slightly larger than 2023’s $30.4m.

This might simply be a result of growing pains on the path to becoming a global hydrogen leader. But with a spotty track record of hitting targets, an investment right now comes paired with a lot of risk. Personally, that’s not something that tempts me, given the opportunities elsewhere in the markets right now.

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Could things get worse from here, or might this be a bargain price at which to add the share to my portfolio?

Business performance is getting much better

In January the company released its interim results.

Revenues for the first half grew 74% to £15.5m and the company recorded a contract backlog of £135m. It has signed multiple sales contracts since the period under review ended.

Not only that, but at the end of October, net cash was £203m. in the months since then I expect it has got smaller. Still, the current market capitalisation of £175m is actually below what the company forecast its cash position would be when its financial year ends next month.

In other words, the market is effectively now placing no value on the company’s business including its impressive hydrogen energy storage technology.

With the finance boss dipping into her own pocket last month to buy some shares, I am wondering whether at its current price ITM might be a bargain for my own portfolio.

There’s one big question I still have

With revenues growing, I think ITM has a foundation on which it could build and succeed.

Bigger turnover can help absorb fixed costs, an important step for a company as it grows and seeks to move from heavy losses to breaking even. If it can break even, I reckon the share price could move far above where it stands today, possibly back to where it used to be and even beyond.

But despite that, I am not ready to invest yet.

The reason for that is simple: profitability. It has long been elusive for ITM — and that remains the case.

Yes, the company’s interim results included exceptional items, which made thing worse than they may be in future. However, even before those exceptional accounting items, the loss from operations was as bad as in the prior year period. At £20.7m, it was very significant (and substantially larger than revenues).

ITM’s strategy of focusing on certain product lines and carefully controlling costs, combined with higher sales, ought to mean that losses get smaller. That may happen over time, but the first-half performance was not reassuring on this score.

The fact remains that this is a heavily loss-making business that continues to bleed cash. Until it proves that its business model can be profitable, I do not plan to invest.

I’m taking a cautious approach

If that happens, the ITM Power share price may leap, meaning I would need to pay more to invest than if I buy now.

That does not bother me, as I see risks in buying today given that ITM has still not proven the long-term viability of its business model to my satisfaction.

Once it does, it may merit a higher share price. For now, I think it merits a sizeable risk premium.

In my opinion, that helps explain why the stock market is effectively valuing the business at zero for now.

The post Down 73%, can the ITM Power share price ever recover? appeared first on The Motley Fool UK.

Such gains in such a short space of time are almost non-existent within the world of large-cap FTSE 100 enterprises. That’s why penny stocks remain so popular despite their extreme levels of risk. But while ITM Power surpassed a market-cap of over £2bn, momentum eventually faded.

Investor excitement turned to frustration as the company struggled to transition from research to commercial production. Order delays and missed earnings targets resulted in a steady trickle of investors selling up and moving on. And the once £3bn+ enterprise with a 717p stock price now sits at a £166m market-cap trading at just 27p per share – a 96% decline.

Such are the risks of investing in unproven businesses regardless of their long-term potential. However, despite what the direction of the share price suggests, ITM Power’s actually been making a lot of promising progress. So are we potentially looking at the start of yet another near-quadruple-digit surge?

Demand’s heating up

It seems demand for green hydrogen is on the rise in Europe. ITM Power has signed new contracts with customers for its Neptune electrolyser system, resulting in a record contract backlog of £135m. At the same time, revenue over the six months leading to October jumped by 74.2%, reaching £15.5m. And management continued to reiterate its full-year sales targets of £18m-£22m.

Profits aren’t expected to materialise, but the group’s cash position is on track to improve, reaching £185m-£195m, giving management ample financial flexibility to continue executing its strategy.

Is a share price surge coming?

If ITM Power can continue building its order book and fulfil its obligations to customers, I wouldn’t be surprised to see the almost-penny stock start climbing again. Having said that, I doubt investors are going to see yet another near 1,000% rally in 2025.

Hydrogen-demanding projects across Europe are seemingly receiving the green light to reach the final investment decision stage of project planning. This undoubtedly offers ITM Power a welcome tailwind on which to capitalise in the coming years. And with limited exposure to the US markets, the firm’s future growth shouldn’t be heavily impacted by the cutting of environmental spending under the new US administration.

However, even CEO Dennis Schulz said: “Gone is the unrealistic hype that the hydrogen economy would develop overnight”, suggesting that an investment in ITM Power today is a long-term buy-and-hold commitment, not a short-term buy-low-sell-high trade.

The bottom line

Having been a critic of ITM Power’s surge in 2020, my opinion on this enterprise has improved over the years, both due to the more reasonable valuation and actual tangible results being delivered. However, even after falling by over 90%, the small-cap enterprise is still trading at a premium relative to its cash flow.

For now, I’m sitting on the sidelines, patiently watching to see if management can continue capturing the developing hydrogen market.

The post This ex-penny stock skyrocketed 900% in 2020! Is it about to surge again? appeared first on The Motley Fool UK.

I cannot say I am very surprised.

Back in January, I wrote that “a lot remains to be done and the company is still heavily lossmaking. So, rather than buy now, I will wait and watch for more concrete signs of a sustainably profitable business model.”

Looking back, I am certainly glad I did not buy before the share price collapsed this year.

Still, a lot has been going right for the business this year. Indeed, today (20 December) it announced that a European hydrogen plant developer had signed on for a front-end engineering design contract for a 50MW site from ITM.

2024 has been a solid year for the business

That is in line with the company setting expectations that it has a growing sales pipeline and expects revenues for its current financial year to grow further, after more than tripling in the prior year.

The company has been able to ramp up its sales, while focusing on a streamlined product portfolio and “tightly controlling” costs in delivering products and services.

Those sound like basic moves and indeed it is what I think a well-run business would have been doing all along.

But I still see it as positive that the company is continuing to expand its top line while making moves that ought to improve its bottom-line performance, which for now remains in the red.

2025 could see the price move up again

So, given that strong sales performance, improved cost discipline and positive revenue growth outlook, why has the ITM share price performed so poorly this year?

The company continues to lose money and burn cash. However, it has a fair amount of cash on hand – over £200m at the end of October. Its current market capitalisation is £207m.

While ITM will have burnt money in the past couple of months, that means that the market is now valuing the green energy share at little more than its cash asset value.

I reckon that makes it a potential bargain. If the company can show that it has a workable business model that sees it making a profit (even a small one) not a loss, I reckon the ITM share price could jump. Potentially that may happen in 2025, given the strong sales momentum going into the year.

I’m increasingly tempted to buy

Looking simply at the cash balance relative to market cap piques my interest. But the company’s technology is also gaining commercial traction.

I feel the ITM business is moving in the right direction. I am increasingly tempted to buy, as I reckon the share could move up in 2025.

However, just as ITM has its discipline when it comes to cash outlay, so do I as an investor. For now the company remains heavily lossmaking. I see an ongoing risk that the share price could fall as it continues to burn cash.

If the price goes up from here, the potential reward is attractive. But for now I remain uncomfortable with the risks, so do not plan to invest yet.

The post Down 43%, could the ITM share price start rising again in 2025? appeared first on The Motley Fool UK.