SMR: Delayed Utility Orders Will Ultimately Support Nuclear Deployment Upside

The analyst price target for NuScale Power has been reduced by approximately $2.15 to about $38.35 as analysts factor in delayed firm order timing, potential additional capital needs tied to ENTRA1 payments, and heightened uncertainty around key utility contracts.

Analyst Commentary

Recent Street research on NuScale Power highlights a mixed outlook, with analysts divided on the balance between long term growth potential and near term execution and financing risks.

Bullish Takeaways

• Bullish analysts still see nuclear energy as poised for a resurgence, viewing NuScale as well positioned to benefit from structurally higher demand for always on, zero carbon baseload power.
• Some valuation frameworks continue to assume meaningful long term deployment of NuScale technology, with targets that embed upside if the company can demonstrate scalability of its partnership model and convert its pipeline into firm orders.
• Longer term, monetization by strategic shareholders is seen as a potential catalyst to improve trading liquidity and simplify the ownership structure, which could support a more conventional valuation profile.
• Even as targets are reduced, bullish analysts generally frame the cuts as timing related, reflecting delayed revenue ramp and working capital shifts rather than a fundamental loss of confidence in the technology.

Bearish Takeaways

• Bearish analysts emphasize execution risk, pointing to expectations that the first firm order may not arrive until 2026. This pushes out the revenue inflection point and weakens near term visibility.
• There is growing concern that NuScale may need to contribute roughly $500M to ENTRA1 under existing agreements. This could potentially require dilutive external capital if cash generation continues to lag deployment plans.
• Some see contract risk as elevated, citing skepticism that a sizeable contract with major utilities such as TVA will materialize in the near to medium term. This could undermine current growth assumptions embedded in the share price.
• Valuation is viewed as stretched by more cautious voices, who argue that the stock still discounts an ambitious build out scenario despite delays, monetization by large shareholders, and rising uncertainty around key project milestones.

What's in the News

• Japan's $550B U.S. investment pledge includes up to $80B for new large nuclear reactors, with U.S. plans to own as many as 10 units. This spotlights listed nuclear names including NuScale Power (Bloomberg)
• NuScale has called a special shareholders meeting for December 16, 2025, where investors will vote on key corporate actions (Company filing)
• At the December 16, 2025 special meeting, NuScale is seeking approval to more than double its authorized Class A common stock from 332 million to 662 million shares, potentially expanding its capacity to raise equity (Company filing)
• NuScale has filed for a $750 million follow on at the market equity offering of Class A common stock, providing a potential funding source for project and corporate needs (Company filing)
• NuScale's strategic partner ENTRA1 Energy is positioned to receive up to $25 billion under a new $550 billion U.S. Japan energy framework, supporting a planned fleet of SMR based power plants including a TVA agreement for up to 6 GW using NuScale technology (Company announcement)

Valuation Changes

• Fair Value: reduced modestly from $40.50 to approximately $38.35, reflecting slightly lower long term expectations.
• Discount Rate: risen slightly from about 9.03 percent to roughly 9.09 percent, signaling a marginally higher perceived risk profile.
• Revenue Growth: essentially unchanged, edging down fractionally from around 105.84 percent to about 105.82 percent, indicating stable long term growth assumptions.
• Net Profit Margin: increased slightly from roughly 11.33 percent to about 11.80 percent, implying a modest improvement in expected long term profitability.
• Future P/E: declined meaningfully from about 170.5x to roughly 155.3x, indicating lower valuation multiples applied to forward earnings.