A first glance at the performance of ITM Power (LSE: ITM) so far this year is enough to make the heart sink. The ITM share price is down 43% so far in 2024.

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.