ITM Power (LSE: ITM) is on a hot streak at the moment. Year to date, it’s up about 120%. Could this UK stock be the next Rolls-Royce (its share price is up more than 10-fold since late 2022)? Let’s discuss.

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.