ITM & Jet2: Is it the right time to buy these 2 AIM stocks?

3 min read | September 17, 2021 01:59 PM BST | By Nidhi Gupta

Highlights

  • ITM Power recorded a sales revenue of £4.3 million for the year ended 30 April 2021, representing a year-on-year increase of 30%.
  • In August 2021, Jet2 entered into an agreement to purchase 36 A321neo jets from Airbus for $4.9 billion.

Alternative Investment Market (AIM) is regarded as the high growth submarket of the LSE. Relatively new and smaller companies seeking to raise capital usually target AIM. In addition, AIM-listed companies have the advantage of greater regulatory flexibility. Nevertheless, this flexibility in regulatory and listing requirements may be associated with risks. Therefore, investors must carefully analyse various aspects and even seek help from professionals, if required, prior to investing in stocks listed on the AIM Index.

ITM & Jet2: Revenue and market cap

(Data source: Company release and EODHD/Others)

Below we explore in detail the investment prospects in two AIM-listed securities – ITM Power and Jet2.

ITM Power Plc (LON: ITM)

ITM Power is an integrated hydrogen energy solutions provider and manufacturer of membrane electrolysers for hydrogen production. The company operates the largest global electrolyser manufacturing facility in Sheffield, with an annual capacity of 1GW. ITM Power raised £172 million in fundraising in November 2020, which includes a £30 million investment by Snam, an energy infrastructure operator. 

The shares of the company are trading at GBX 401.50, up by 1.72% at 10:11 AM BST on Friday 17 September 2021. In the last one year, the shares of the company returned 52.63% to shareholders, and its current market cap stands at £2,175.10 million.

ITM Power recorded a sales revenue of £4.3 million for the year ended 30 April 2021, representing a year-on-year increase of 30% from £3.3 million in 2020 driven by the growing shift towards cleaner fuels and net-zero targets. Its net cash balance at the end of year was £176.1 million compared to £39.9 million in 2020.

Jet2 Plc (LON: JET2)

Jet2.com Limited is a UK-based budget airline engaged in providing charter and scheduled flights. In August 2021, Jet2 entered into an agreement to purchase 36 A321 neo jets from Airbus for $4.9 billion.

The shares of the company are trading at GBX 1,212.50, up by 4.44% at 10:13 AM BST on Friday 17 September 2021. In the last one year, the shares of the company returned 66.43% to shareholders, and its present market cap stands at £2,491.73 million.

For the year ended 31 March 2021, Jet2 recorded revenue of £395.4 million, an 89% year-on-year decline compared to £3,584.7 million in 2020. The massive fall in revenues can be attributed to the COVID-19 pandemic that brought all travel and airline operations to a standstill.

CONCLUSION:

Rising vaccination rates, relaxation of COVID-19 restrictions as well as the reopening of the economy are driving back investors to stock markets. AIM-listed companies provide investors with prospect to earn higher returns on their investments. However, investors must analyse all fundamentals before taking the plunge.


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