Glory days for The power of ITM (LSE: ITM) shareholders now seem like a distant memory. In reality, however, it was only in 2021 that the ITM Power share price broke above £6. It’s a long way from that now – it’s down 40% in the last five years.

But could a stock currently trading for pennies be a potential long-term bargain?

The company is more focused and better prepared for success

Over the last few years, ITM has focused its strategy much more strongly than before. Instead of continuing to do a lot of things, he has essentially focused on areas where he believes he has what it takes to do well and is bringing a more commercial rigor to his activities.

This makes sense for a company that was bleeding cash. Hopefully, by getting rid of costly distractions, you can devote more time and energy to areas that offer decent prospects.

Last year’s results can prove this. Revenues more than tripled to £16.5m. While the pre-tax loss was still a painful £27.1 million (164% of revenue), it still represented a decline of 73% on the previous year.

I think that’s encouraging. Greater cost control can support reduce losses, and increasing sales helps bring savings. Ultimately, this could be the path to profitability – even if there is still a long way to go.

ITM Power makes continuous progress

The company expects further revenue growth this year.

It has also made progress on a number of fronts in recent months, such as reaching a up-to-date milestone in reducing iridium in battery stacks and signing its first supply contract Neptune W unit.

In today’s quotations update (December 5), the company presented a summary of its results in the first half of the current financial year.

This included revenue of £15.2m: almost as much as the company managed to achieve in the full 12 months of the last financial year. It also lowered the range of expected loss before interest, taxes, depreciation and amortization for the full year.

I’m starting to think about investing

Like some of the UK’s green energy partners, ITM has promising technology. More and more I think that the raise in sales confirms this.

But I still see some risk here. The constant cash burn is a gigantic concern for me despite the company’s enormous cash pile.

My biggest concern, however, is that ITM has not yet proven its commercial model at scale. Growing sales are one thing, but before investing, I’d really like to see proof that this model delivers sustainable profitability.

Until this happens, I see no reason for the share price to rise dramatically, let alone to near £6. Previously reaching this level reflected increased optimism about the company’s prospects, rather than the fundamentals of the business. This euphoric rush is long gone.

I doubt the ITM Power share price will hit £6 again unless business results improve dramatically even from today. However, I still see it as a potential opportunity, but the risks are discouraging me from investing for now.