ITM Power Share Price Forecast June 2021- Time to Buy ITM Shares?
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Founded in 2001, ITM Power PLC(LSE: ITM) specialises in the manufacture of integrated hydrogen energy systems. The shares of the company have been in the news this week after they decreased in value, leading many to question their own investment choices. The shares have lost more than 30% of their value this year. Many believe that the relatively slow progress rate in scaling up its commercial operations has led to a decrease in ITM share prices.
ITM Shares – Technical Analysis
When we take a look at ITM Power PLC’s financial statement, They have not released their income statement for 2020. Their last income statement of 2019, reflects total revenue of £3.29 million, with a profit margin of -898.24%. The total market capitalization of the company stands at £2.017 billion and a debt to equity ratio(MRQ) of 0.1417.
When we look at the technical side, moving averages such as Exponential Moving Average (10)(373.1), Simple Moving Average (10)(376.0), Exponential Moving Average (20)(377.1), and Simple Moving Average (20)(377.0) point towards a sell action. On the other hand, oscillators such as Relative Strength Index (14)(44.7), Stochastic %K (14, 3, 3)(25.2), Commodity Channel Index (20)(−89.7), and Average Directional Index (14)(16.4) point towards a neutral action. ITM Power PLC shares opened on June 21st at 365.4 with a downtrend of -0.22%.
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Recent Developments
Some investors see immense growth potential in ITM Power after the company opened a new gigawatt factory earlier this year. It has also experienced a 62% increase in work in progress compared to the year before. The company has also experienced a sharp fall in revenue from the prior year, and some bad luck due to the pandemic. The company has been experiencing losses but can withstand them thanks to the liquidity of £176 million at year-end. It is also pretty common for early-stage technology companies to hemorrhage money. If ITM Power can ramp up sales, the new factory should help in providing the production capacity boost it needs.
Should you buy ITM Power Shares?
ITM Power’s market cap still exceeds £2 billion even after the price of its shares fell drastically. The company has shown signs of commercial success such as a growing backlog of work and a sizeable pipeline. However, a lot of hope regarding ITM shares is based on a very small amount of proven success. The company’s valuation presents itself as more of a speculation than an investment. There is also the additional chance of the company diluting shareholders to boost liquidity, as was the case last year. With several variables such as the one’s mentioned above, it’s wise to stay away from ITM shares at the moment.
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