A primary look on the efficiency of ITM Energy (LSE: ITM) to date this yr is sufficient to make the guts sink. The ITM share price is down 43% to date in 2024.

I can not say I’m very stunned.

Again 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.”

Trying again, I’m definitely glad I didn’t purchase earlier than the share price collapsed this yr.

Nonetheless, quite a bit has been going proper for the enterprise this yr. Certainly, immediately (20 December) it introduced {that a} European hydrogen plant developer had signed on for a front-end engineering design contract for a 50MW web site from ITM.

2024 has been a strong yr for the enterprise

That’s consistent with the corporate setting expectations that it has a rising gross sales pipeline and expects revenues for its present monetary yr to develop additional, after greater than tripling within the prior yr.

The corporate has been capable of ramp up its gross sales, whereas specializing in a streamlined product portfolio and “tightly controlling” prices in delivering services and products.

These sound like fundamental strikes and certainly it’s what I believe a well-run enterprise would have been doing all alongside.

However I nonetheless see it as optimistic that the corporate is continuous to develop its high line whereas making strikes that ought to enhance its bottom-line efficiency, which for now stays within the purple.

2025 might see the price transfer up once more

So, on condition that robust gross sales efficiency, improved value self-discipline and optimistic income development outlook, why has the ITM share price carried out so poorly this yr?

The corporate continues to lose cash and burn money. Nonetheless, it has a good amount of money available – over £200m on the finish of October. Its present market capitalisation is £207m.

Whereas ITM could have burnt cash up to now couple of months, that signifies that the market is now valuing the inexperienced vitality share at little greater than its money asset worth.

I reckon that makes it a possible discount. If the corporate can present that it has a workable enterprise mannequin that sees it making a revenue (even a small one) not a loss, I reckon the ITM share price might bounce. Doubtlessly which will occur in 2025, given the robust gross sales momentum going into the yr.

I’m more and more tempted to purchase

Trying merely on the money steadiness relative to market cap piques my curiosity. However the firm’s expertise can be gaining business traction.

I really feel the ITM enterprise is transferring in the suitable route. I’m more and more tempted to purchase, as I reckon the share might transfer up in 2025.

Nonetheless, simply as ITM has its self-discipline with regards to money outlay, so do I as an investor. For now the corporate stays closely lossmaking. I see an ongoing danger that the share price might fall because it continues to burn money.

If the price goes up from right here, the potential reward is engaging. However for now I stay uncomfortable with the dangers, so don’t plan to take a position but.