Is NuScale Power Stock a Buy Now?

NuScale Power (SMR) has seen its stock surge over 330% in the past year, driven by catalysts including a supply deal with Doosan Enerbility, potential U.S. Department of Energy funding, Amazon's support for SMR development, and progress on its Romania project, which boosted 2024 revenue by 62% to $37 million. This rally occurred despite the cancellation of its Idaho project and widening net losses of $348 million in 2024. While analysts project substantial revenue growth and narrowing losses by 2026, contingent on 77MW NRC approval and new U.S. contracts, concerns remain regarding significant share dilution, insider selling, and sustained unprofitability, positioning SMR as a speculative play in the nascent SMR market.

Analysis

NuScale Power (SMR) presents a high-contrast investment profile, characterized by significant operational catalysts set against substantial fundamental risks. The stock's 330% surge over the past year reflects growing investor optimism, fueled by a new supply agreement with Doosan Enerbility, potential for up to $900 million in U.S. Department of Energy funding, and progress on its 462 MW RoPower project in Romania, which drove a 62% revenue increase to $37 million in 2024. However, this top-line growth is overshadowed by widening net losses, which grew to $348 million from $180 million, and the recent cancellation of its domestic Idaho project due to cost overruns. The company's future hinges on several key assumptions, most notably the U.S. Nuclear Regulatory Commission's approval of its more cost-effective 77 MW module, expected by mid-2025. While analysts forecast revenue more than doubling to $74 million in 2025, significant headwinds persist, including a lack of new U.S. contracts, an 83% increase in outstanding shares over two years, and a heavy 16-to-1 ratio of insider selling versus buying over the past twelve months. Despite a strong cash position of $447 million, these factors suggest that while the valuation of 10 times forward sales is not prohibitive, the path to profitability is uncertain and fraught with execution risk.

Key Decisions for Investors

• Acknowledge that NuScale Power is a highly speculative investment where the stock price is driven by future potential in the nascent SMR market, not current financial performance, demanding a high tolerance for volatility.
• Closely monitor the outcome of the Nuclear Regulatory Commission's review of the 77 MW module, expected by mid-2025, as regulatory approval is a critical, non-negotiable catalyst for achieving economic efficiency and validating bullish growth forecasts.
• Factor in the significant red flags of an 83% share dilution over two years and the pronounced insider selling, as these actions may cap upside potential and signal a lack of internal confidence.
• Investors should scrutinize company announcements for new U.S. contracts, particularly from the tech sector, as a key proof point of market adoption beyond its single major project in Romania.