The Ceres Power (CWR) Share Price Is Down 16% in a Month. Is It a Buy?

The Ceres Power Holdings plc (LON: CWR) share price has fallen 16% in one month, and many now wonder whether the company is a buy at current prices. To answer this question, we have to look at the hydrogen power company’s fundamentals and the technical picture pain\ted by its share price chart.

The last significant announcement from Ceres Power was its partnership with Shell to produce green hydrogen energy in a move that some have touted as a crucial turning point in making its hydrogen power technology available at scale.

Also read: Five Best Green Energy Stocks 2022.

The two companies are set to build and operate a plant that produces solid oxide fuel cells that generate hydrogen energy; hence, they are known as solid oxide electrolysis cells (SOECs) that can be used to generate hydrogen power and electricity on a large scale.

The deal could be of great significance to Ceres Power if it can build the plant and make it work. While the technology to build and run the proposed plant exists, the main question is whether it can do it on a scale large enough to be economically viable.

The partnership between Shell and Ceres Power was announced in late June, and many hope it will lead to a significant societal change. However, only time will tell whether the partnership will lead to a plant that will transform the power generation dynamics in society.

Ceres Power was founded in 2001 and has been around for over 20 years, making it one of the oldest hydrogen power companies. Still, some have pointed out that its solid oxide fuel cells use legacy technology, which is why the company invests heavily in R&D to develop new cutting-edge technologies.

In the past, I have pointed out that the company has a lofty valuation and is now worth £1.07 billion compared to its revenues, which were a meagre £31.7million in 2021. Ceres is not the only tech firm that is richly valued since we have many such firms in all the leading stock markets.

So, should you buy Ceres shares? The short answer is Ceres shares look attractive at current prices since they are trading above a crucial support level. I would buy CWR shares with a stop-loss order below the 500p support level. A break of the level would invalidate the bullish thesis.

*This is not investment advice. Always do your due diligence before making investment decisions.

The Ceres Power share price.

The Ceres Power share price has fallen 16.15% in one month but seems to have bottomed. What’s next?