Last Update19 Sep 25Fair value Decreased 1.44%
Analysts have slightly lowered NuScale Power’s price target to $41.69, reflecting persistent concerns about execution risk, lengthy commercialization timelines, and valuation relative to early project traction, even as new partnerships and rising demand for carbon-free baseload power provide notable upside.
Analyst Commentary
- Major upside potential highlighted from the landmark TVA and ENTRA1 Energy partnership to deploy up to 6GW of NuScale SMR capacity, signaling commercial traction and technology validation.
- Bullish analysts cite the growing global and domestic demand for always-on, carbon-free baseload power, backed by policy tailwinds and an increasing need from sectors like data centers and AI.
- Execution risks and long technology commercialization timelines remain a focus for bearish analysts, with skepticism over NuScale’s ability to deliver scalable projects on schedule and at competitive costs.
- Valuation concerns persist among bearish analysts, who argue current prices already assume significant future success despite NuScale’s early commercialization stage and a lack of substantial binding contracts.
- Competitive landscape and evolving customer credibility (shift from regulatory approvals to actual orders) are flagged as key variables, with only a handful of SMR developers perceived as progressing meaningfully in customer acquisition.
What's in the News
- NuScale Power will support ENTRA1 Energy’s landmark agreement with TVA to deploy up to 6 gigawatts of NuScale SMR capacity, marking the largest SMR deployment program in U.S. history and targeting rapidly rising electricity demand.
- NuScale entered a Partnership Milestones Agreement with ENTRA1 Energy, committing $35–$55 million towards its SMR technology for ENTRA1 projects, with funding disbursed upon achieving specific commercial and developmental milestones.
- NuScale filed a $500 million follow-on equity offering via an at-the-market Class A Common Stock transaction.
- GSE Solutions developed a hydrogen fuel cell generation and storage plant simulator for NuScale’s hydrogen production initiatives, enabling integration and optimization of commercial-scale hydrogen production with SMR control systems.
- Paragon Energy Solutions signed a strategic agreement to supply advanced monitoring and safety I&C systems for NuScale’s SMR projects, further enhancing reliability and security for ENTRA1 Energy Plants utilizing NuScale technology.
Valuation Changes
Summary of Valuation Changes for NuScale Power
- The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $42.30 to $41.69.
- The Future P/E for NuScale Power has risen from 162.92x to 176.09x.
- The Consensus Revenue Growth forecasts for NuScale Power has fallen from 112.2% per annum to 105.4% per annum.
Key Takeaways
- NuScale's advanced SMR commercialization and partnerships position it well for accelerated revenue growth and immediate deployment in competitive energy markets.
- Efficiency improvements and strategic focus on reducing expenses are expected to enhance profitability and support margin expansion.
- Challenges in securing agreements, funding uncertainties, and potential supply chain issues threaten cash flow, earnings, and profitability, despite project advancements.
Catalysts
About NuScale Power- Provides small modular reactor technology solutions.
- NuScale's involvement in the RoPower 6-module small modular reactor (SMR) power plant in Romania indicates future meaningful revenue and cash flow through its partnership in the Fluor-led Front-End Engineering and Design (FEED) Phase 2. This project enhances NuScale's revenue prospects.
- With an NRC-approved SMR technology and the commitment of over $2 billion towards its development and licensing, NuScale is uniquely positioned for immediate commercial deployment compared to competitors focused solely on demonstration plans. This potentially accelerates revenue growth once commercial operations commence.
- NuScale is advancing the manufacturing of long-lead materials for 12 modules, anticipating customer demand, which supports a smooth production ramp-up, reducing delivery times significantly, and potentially boosting future revenue and earnings.
- Significant demand for nuclear energy, especially from AI-driven data centers like Microsoft and Meta, could lead to increased interest and order placements for NuScale’s SMR technology. This could materially increase future revenues as data centers triple their energy use by 2028.
- NuScale's focus on reducing operating expenses, as noted by the substantial year-over-year decrease, could lead to improved net margins. Efficiency improvements transitioning from R&D to commercialization are likely to enhance profitability and support margin expansion.
NuScale Power Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming NuScale Power's revenue will grow by 121.5% annually over the next 3 years.
- Analysts are not forecasting that NuScale Power will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate NuScale Power's profit margin will increase from -368.8% to the average US Electrical industry of 10.5% in 3 years.
- If NuScale Power's profit margin were to converge on the industry average, you could expect earnings to reach $42.2 million (and earnings per share of $0.12) by about April 2028, up from $-136.6 million today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 248.0x on those 2028 earnings, up from -13.0x today. This future PE is greater than the current PE for the US Electrical industry at 19.7x.
- Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 7.48%, as per the Simply Wall St company report.
NuScale Power Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- The complexity and negotiation challenges of securing long-term power purchase agreements with prospective customers could delay revenue generation and impact cash flow projections.
- The U.S. government grant-related uncertainties and the administrative process of securing additional funding highlight a possible risk to future liquidity and investment inflow, potentially affecting financial stability and development timelines.
- Potential bottlenecks in the supply chain or manufacturing process for the small modular reactors, despite current advancements, could lead to increased operational costs and affect net margins.
- The dependence on the successful commercialization of ENTRA1 Energy projects and the potential delays in customer acquisition for NuScale's long-lead modules pose a risk to revenue forecasts and earnings projections.
- The ongoing regulatory approval process with the NRC for the power upgrade and overall project complexity may result in unanticipated expenses or timeline shifts, impacting future earnings and profitability.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $24.46 for NuScale Power based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $29.0, and the most bearish reporting a price target of just $17.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $402.3 million, earnings will come to $42.2 million, and it would be trading on a PE ratio of 248.0x, assuming you use a discount rate of 7.5%.
- Given the current share price of $13.91, the analyst price target of $24.46 is 43.1% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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