NuScale Power (SMR) stock is down over 30% in the past month, catalyzed by a reported year-over-year rise in net losses from $56.4 million to $180.3 million in the fourth quarter despite increasing its sales from $4.6 million to $34.2 million in that time. Despite the financial setbacks, NuScale remains committed to commercialization efforts while improving operational efficiency. Even with a challenging market environment and operational hurdles, the company finished the year with cash and short-term investments worth $446.7 million, and no debt.
Meeting a Rising Demand
NuScale Power provides innovative small modular reactor (SMR) nuclear technology with its NuScale Power Module, a compact, secure pressurized water reactor. Each module can produce 77 megawatts of electricity or 250 megawatts of thermal and can be flexibly configured to deliver up to 924 MWe, meeting varying customer requirements.
The surge in interest in nuclear energy is being driven by the anticipation of increasing energy needs to accommodate expanding data centers for AI support. This has been reinforced by President Donald Trump’s announcement of a massive $500 billion cooperative venture with Oracle (ORCL), OpenAI, and SoftBank (SFTBY) focused on building AI infrastructure. U.S. Energy Secretary Chris Wright has announced plans to increase commercial nuclear power usage as a key component of the country’s energy strategy.
Wright plans to utilize the Department of Energy’s resources for research, development, and loans to drive innovation. His main focus areas include promoting affordable, secure, and reliable energy technologies, with particular emphasis on advanced nuclear power. This aligns with President Trump’s executive orders advocating for U.S. energy dominance. To further these goals, regulatory streamlining and permitting reform are emphasized to attract private sector investments and accelerate the construction of new energy projects.
Mounting Losses Amid Bullish Prospects
NuScale faced a tough financial year in 2024, closing the year with a net loss of $348.4 million despite an increase in revenue to $37.0 million. However, despite rising losses, the company’s cash position was notably improved by the end of the fourth quarter, with cash equivalents and short-term investments totaling $446.7 million, a considerable rise from the $161.7 million recorded in the third quarter. This was bolstered by the cash proceeds of $227.7 million received from exercising approximately 97% of outstanding company warrants in December.
Revenue growth has primarily been driven by Romanian RoPower FEED Phase 2 progress on the Doicești small modular reactor project. As the company prepares for commercialization, advanced discussions are ongoing with U.S. hyperscalers. Their commercialization partner, ENTRA1, continues to be a significant link between NuScale and prospective customers.
Analysts following the company have been bullish about its prospects. For instance, B. Riley’s Ryan Pfingst has maintained a Buy rating with a price target of $28, emphasizing the importance of a new project announcement to sentiment. Similarly, Canaccord Genuity’s George Gianarikas maintains a Buy rating and price target of $26, pointing out NuScale’s strong cash management, significant revenue growth, and unique position as the only small modular reactor approved by the US Nuclear Regulatory Commission. The management’s confidence in securing upcoming contracts and proactively ordering materials for future projects is expected to boost the company’s market position further.
NuScale Power is rated a Strong Buy based on the aggregate recommendations of three analysts. The average price target for SMR stock is $27.00, which represents a potential upside of 69.28% from current levels.
