On Thursday, Craig-Hallum maintained a Buy rating on NuScale Power (NYSE:SMR) shares and increased the price target from $16.00 to $21.00. The firm recognizes a burgeoning nuclear power renaissance, acknowledging nuclear energy as a key player in meeting the growing demand for baseload power while addressing the urgent need to decarbonize.
The analyst highlighted the bipartisan support for nuclear power and its escalating commercial and regulatory traction globally. Small modular nuclear reactors (SMRs), in particular, are gaining attention for their potential role in various applications, notably in providing zero-emissions baseload power essential for AI and data centers.
Recent developments have intensified the buzz around nuclear power. High-profile announcements from tech giants such as Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) involving SMRs have signaled a significant industry shift.
Although NuScale Power was not directly involved in these deals, the firm's established regulatory lead of over five years and its substantial pipeline, including AI and data center customers, place it in a prime position to capitalize on the accelerated adoption of nuclear and SMR technologies.
Craig-Hallum anticipates that this interest in nuclear power is the start of a multi-decade megatrend. With NuScale Power being one of the few publicly traded companies offering investors a way to engage in the small modular reactor market, the firm's decision to raise the price target reflects its optimistic outlook on the company's growth potential.
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 also entered into a key contract with Fluor (NYSE:FLR) Transworld Services Inc. for its small modular reactor project in Romania. This marks a significant step in NuScale's international expansion and its role in the global nuclear energy sector.
Analyst firms Craig-Hallum, CLSA, and TD Cowen have initiated or maintained coverage on NuScale Power. Craig-Hallum assigned the stock a Buy rating, seeing potential for the company's growth in the small modular nuclear reactor market.
CLSA also gave an Outperform rating, despite the expectation of operating at a loss for several years. TD Cowen maintained its Buy rating, 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 NuScale Power's journey towards revolutionizing the nuclear power industry with its small modular reactors. The company's progress and strategic agreements are closely watched by investors and industry observers alike.
NuScale Power's journey towards these milestones is marked by careful cash management and strategic partnerships. Its ability to secure additional revenue and manage its cash burn rate will be vital as it moves towards its goal of revolutionizing the nuclear power industry with its small modular reactors.
InvestingPro Insights
NuScale Power's recent market performance aligns with Craig-Hallum's bullish outlook. According to InvestingPro data, the company has seen a remarkable 286.82% price total return over the past six months, and a 239.93% return over the last year. This surge in stock price is reflected in the fact that SMR is currently trading near its 52-week high, with its price at 98.25% of the highest point in the past year.
InvestingPro Tips highlight that NuScale Power holds more cash than debt on its balance sheet, which could provide financial flexibility as it seeks to capitalize on the growing interest in small modular reactors. However, investors should note that the company is not currently profitable, and analysts anticipate a sales decline in the current year.
For those interested in a deeper analysis, InvestingPro offers 16 additional tips for NuScale Power, providing a comprehensive view of the company's financial health and market position.
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