NuScale Power (SMR +8.92%) is a company trying to change how nuclear energy is generated. In simplest terms, it builds small modular reactors (SMRs) that can be mass-produced in a factory. These reactors are modular, can be assembled for greater or lesser power capacity, and generally cost less than a conventional full-sized nuclear power plant.
NuScale's name has emerged with quite a few other novel energy companies, including fellow nuclear designer Oklo and Bloom Energy, as a potential supplier of clean power for artificial intelligence (AI) and data centers. Unlike Oklo and Bloom, whose stock price has risen since last May, NuScale is trading about 65% lower than last year.
At under $13 a share and with a market capitalization of roughly $4.5 billion, is NuScale worth an investment today?
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Big nuclear promises, tiny revenue to start
The bullish argument for buying NuScale at today's price goes something like this: We need nuclear power. It's not just something we might need, or would like to have. It's a source of clean power that, if expanded across the U.S., could feed growing electricity demands that the current grid could struggle to handle.
That's NuScale's background, a background that has helped it as much as its competitors. More specific to NuScale's business, a bullish argument for the stock would point out its first-mover advantage: To date, NuScale is the only nuclear reactor developer in the U.S. with an NRC-approved SMR design. Other small reactor designers, like Oklo and Nano Nuclear Energy, lack this approval and could spend the next year or two trying to get it.
NYSE: SMR
Key Data Points
Another reason to feel excited by NuScale is its projects under development. NuScale is currently working with a Romanian utility to replace a former coal site with a 462-megawatt electric power plant. In the U.S., it is expected to deploy 6 gigawatts of SMR technology for the Tennessee Valley Authority (TVA) through its partner ENTRA1.
Realistically, neither of these projects will be finished before 2030, and NuScale isn't generating meaningful revenue yet. Its first-quarter revenue was about $565,000, while it incurred an operating loss of $57 million. It has a strong liquidity position of roughly $1 billion -- $341 million in cash and equivalents, the rest in investments -- but its lack of revenue right now makes its $4.5 billion market value seem absurdly high.
Data by YCharts.
As such, NuScale isn't a screaming buy. Most investors will probably want to pass this nuclear energy stock up, at least until the company notches its first firm sale.
