On Thursday, B.Riley adjusted its outlook on Nuscale Power (NYSE: SMR), raising the stock's price target to $14 from the previous $8, while maintaining a Buy rating. The revision follows a virtual event where the company, alongside Oklo Inc., showcased the advantages of their nuclear technologies over traditional nuclear and other clean energy sources.
During B. Riley's Virtual Energy Infrastructure Investment Ideas Day, NuScale Power and Oklo Inc. presented their respective technologies. They emphasized the economic and operational efficiencies of Small Modular Reactors (SMRs) and advanced nuclear microreactors in comparison to large-scale nuclear projects, which are often marred by high costs and delays. Moreover, they pointed out the limitations of solar and wind energy due to their intermittent nature and the current impracticality of other clean baseload options, such as renewables paired with batteries or natural gas with carbon capture, at a large scale.
NuScale Power is focusing on light-water reactor designs, with its six and 12-module plants expected to produce 462 and 924 MWe, respectively. In contrast, Oklo is developing an advanced liquid metal fast fission reactor, targeting smaller-scale microreactors with outputs of 15 and 50 MWe. Oklo's approach to market entry also differs, as it plans to operate its reactors, whereas NuScale intends to sell or license its technology and offer related services.
The revised price target reflects NuScale's advantageous position in light of the recent Department of Energy (DOE) funding announcements and the anticipation that the company will experience less dilution than previously expected. B.Riley's updated valuation of NuScale Power at $14 per share is informed by these strategic developments and the company's expected market trajectory.
In other recent news, NuScale Power Corporation reported its Q1 2024 financial results, highlighting its strategic advancements in small modular reactor (SMR) technology and ongoing projects. The company noted a net loss of $48.1 million for the quarter but remains confident in its role in expanding the power grid. NuScale's financial position remains strong with $137.1 million in cash and no debt, despite a relatively low revenue of $1.4 million.
The company is engaging with data center and AI companies and exploring opportunities in the petrochemical industry. Its partnership with Inter One Energy supports power plant development and its 77 MW uprate design is currently under review by the U.S. NRC. The company is also awaiting two SMR appropriations programs totaling $900 million.
These recent developments indicate NuScale's commitment to meeting the global demand for clean and reliable energy. The company is in advanced talks with financial institutions to finance infrastructure projects and expects to significantly contribute to the energy needs of various industries.
InvestingPro Insights
Following B.Riley's optimistic adjustment on NuScale Power, InvestingPro data and tips provide further context for investors considering the company's prospects. NuScale's market capitalization stands at a robust $2.8 billion, reflecting significant market confidence. Additionally, the company's revenue has shown a notable increase of 25.7% over the last twelve months as of Q1 2024, signaling strong sales growth potential that analysts have been anticipating. However, it's worth noting the substantial revenue contraction of -74.95% in Q1 2024, which may raise concerns about short-term volatility.
InvestingPro Tips highlight that NuScale Power holds more cash than debt on its balance sheet, a reassuring sign of financial stability. Moreover, the stock has experienced a significant return over the past week, month, three months, and even six months, with a one-week price total return of 21.14% and a staggering six-month return of 238.82%. These impressive short-term gains indicate a high level of investor enthusiasm. On the flip side, the company's gross profit margins remain weak at 12.87%, and the stock is currently trading at a high Price/Book multiple of 22.38, which could suggest a premium valuation.
For investors looking for a deeper dive into NuScale Power's financials and market performance, InvestingPro offers additional insights. There are 16 more InvestingPro Tips available for NuScale Power at https://www.investing.com/pro/SMR, providing a more comprehensive investment picture. Utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, further empowering your investment decisions with premium analysis and data.
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