3 Reasons Wall Street Analysts Remain Bullish on NuScale Power Stock

NuScale Power (SMR) shares are down over 30% YTD and more than 70% in the past 12 months, reflecting ongoing execution/customer-risk concerns. However, B. Riley maintained a Buy rating while cutting its price target to $15 (from $19), citing a potential TVA power purchase agreement that could lock in long-term revenue and reduce cancellation risk. The company also has a Romania SMR project progressing in government review, and it has $1.9B in cash with roughly $60M in operating losses recently, which the CFO indicated could support the business until potential PPA catalysts (potentially by end-2026 for TVA).

Analysis

SMR is trading less like an operating utility and more like a long-duration project finance option. The market is discounting three layers of uncertainty at once: contract conversion, project financing, and future dilution. That makes the stock highly sensitive to timing slippage; even if the end-state is attractive, a few quarters of delay can overwhelm the narrative and keep the multiple compressed.

The key second-order effect is that any credible PPA would not just help SMR — it would re-rate the entire pre-revenue SMR complex by lowering perceived execution risk and cost of capital. Conversely, if the TVA process stalls, capital is likely to rotate toward nearer-term beneficiaries of AI power demand such as GEV and utility-scale contracted power names, while SMR-type developers face tighter financing conditions and a higher implied probability of shareholder dilution. The real fundamental question is not demand for nuclear, but whether the company can convert optionality into bankable cash flows before equity holders get diluted again.

Over the next 1-3 months, the setup is mainly catalyst trading, not fundamentals. Over 6-18 months, the thesis hinges on whether management can prove that the cash runway is sufficient without another punitive capital raise; if not, the equity becomes a serial financing story. The contrarian miss is that the stock may still be too expensive for a company whose best-case outcomes are years away and whose execution milestones remain binary.

Key Decisions for Investors

• Do not chase SMR outright ahead of a signed TVA PPA; treat it as a binary catalyst name and prefer waiting for confirmation. If already long, hedge with short-dated puts or trim into any pre-news squeeze over the next 1-3 months.
• Relative value: long BWXT / short SMR for the next 3-6 months. BWXT monetizes nuclear demand through actual revenue today, while SMR remains exposed to financing, dilution, and timeline risk; this should outperform if the catalyst slips again.
• If TVA signs a binding PPA, buy SMR on the first close after the announcement for a tactical rerating trade. Expect a 20-40% upside window on de-risking, but cut quickly if the follow-through fails or financing terms look punitive.
• Watch the Romanian financing/partnering update as a secondary catalyst, but do not assign it full value until capital sources are disclosed. If that milestone is vague or delayed again, it is a warning that the 6-18 month story is not de-risking.