NuScale Power Corp (NYSE:SMR), a company specializing in small modular nuclear reactor technology, has entered into a significant contract with Fluor (NYSE:FLR) Transworld Services Inc., a subsidiary of Fluor Enterprises, Inc. The agreement, dated October 3, 2024, is for the provision of Front-End Engineering and Design (FEED) Services related to NuScale's small modular reactor project in Romania.
Under the terms of the Task Order, which falls under a Master Services Agreement from January 25, 2021, NuScale Power OVS, LLC, a subsidiary of NuScale Power Corporation, will deliver FEED services for the RoPower Nuclear S.A. Doicesti project. This development marks a crucial step in the advancement of NuScale's international expansion and its role in the global nuclear energy sector.
The Task Order with Fluor Transworld Services Inc. is particularly noteworthy as Fluor Enterprises, Inc. is a related party to NuScale Power Corp. This suggests a strategic partnership leveraging Fluor's expertise in the execution of the project.
The specifics of the Task Order highlight the ongoing collaboration and the intricate planning required for the implementation of the small modular reactor project. While the full text of the Task Order is attached as Exhibit 10.1 to the Current Report on Form 8-K, certain non-material schedules and exhibits have been omitted. However, NuScale has committed to providing supplemental copies of any omitted documents upon the SEC's request.
NuScale's technology is under the spotlight as the world increasingly seeks sustainable and reliable energy sources. The company's small modular reactors are designed to offer a more flexible and scalable alternative to traditional nuclear power plants, which could be crucial in meeting diverse energy needs and carbon reduction goals.
The financial details of the agreement were not disclosed in the press release statement. NuScale Power Corp's shares are traded on the New York Stock Exchange under the ticker symbol SMR, with associated warrants under SMR WS.
This latest development reflects NuScale Power Corp's commitment to advancing nuclear technology and its potential role in the future energy mix. The company's progress and strategic agreements are closely watched by investors and industry observers alike.
In other recent news, NuScale Power reported a net loss of $74.4 million in Q2 2024 financial results while maintaining a strong cash position of $136 million. The company highlighted the progress of the RoPower project and a new revenue-generating agreement in Romania. Craig-Hallum analyst initiated coverage on NuScale Power, assigning the stock a Buy rating and setting a price target of $16.00. The firm sees potential for the company's growth in the small modular nuclear reactor market. Analyst firm CLSA also initiated coverage on NuScale with an Outperform rating, despite the expectation of operating at a loss for several years. TD Cowen maintained its Buy rating on NuScale, emphasizing the company's ongoing cash consumption and the expected reduction in the pace of cash usage due to revenue from RoPower. These are recent developments in the company's journey towards revolutionizing the nuclear power industry with its small modular reactors.
InvestingPro Insights
NuScale Power Corp's recent contract with Fluor Transworld Services Inc. for the Romania project aligns with the company's ambitious growth strategy, despite facing some financial challenges. According to InvestingPro data, NuScale's revenue for the last twelve months as of Q2 2023 was $13.86 million, with a concerning revenue decline of 22.64% over the same period. This decline is further emphasized by the quarterly revenue drop of 83.31% in Q2 2023.
Despite these financial headwinds, the market seems optimistic about NuScale's future prospects. The stock has shown a remarkable 292.1% year-to-date price return and a 138.01% return over the past year. This performance suggests that investors are betting on the company's long-term potential in the small modular reactor market.
InvestingPro Tips highlight that NuScale holds more cash than debt on its balance sheet, which could provide financial flexibility as it pursues projects like the one in Romania. However, it's worth noting that analysts anticipate a sales decline in the current year and do not expect the company to be profitable this year. These tips underscore the importance of the new contract in potentially improving NuScale's financial outlook.
For investors considering NuScale, it's crucial to note that the stock generally trades with high price volatility and is currently trading at a high revenue valuation multiple. These factors, combined with the company's innovative technology and recent contract wins, make NuScale an intriguing but potentially risky investment opportunity in the evolving nuclear energy sector.
InvestingPro offers 12 additional tips for SMR, providing a more comprehensive analysis for those interested in delving deeper into NuScale Power Corp's investment potential.
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