SMR: Future Government Reactor Buildout Will Ultimately Support Nuclear Deployment Upside

Analysts have trimmed their price target on NuScale Power, moving fair value expectations down by about $2 to roughly $36.60, as they factor in delayed deployment timelines, increased capital needs tied to ENTRA1 payments, and uncertainty around major contract wins, despite modestly improved margin assumptions.

Analyst Commentary

Recent Street research reflects a mixed outlook on NuScale Power, with both supportive and cautious views shaping how investors think about valuation, execution risk, and long term growth prospects.

Bullish Takeaways

Bullish analysts note that NuScale remains central to broader small modular reactor and energy transition themes, which could support premium valuation multiples if deployment milestones are met.
Some see improved margin assumptions and potential monetization activity at related stakeholders as indicators that the platform can ultimately generate attractive returns on capital once commercial scale is reached.
Longer term revenue visibility tied to large potential firm orders is viewed as intact, even as timelines slip, supporting the case for structural growth beyond the current forecast window.
Supportive commentary around ongoing partnership frameworks, including the PMA and ENTRA1 structure, is seen as evidence that NuScale continues to advance key strategic relationships required for future project wins.

Bearish Takeaways

Bearish analysts highlight delayed deployment timelines, with firm order expectations shifting into 2026, as a key driver of reduced price targets and lower near term revenue visibility.
Concerns about sizable payments to ENTRA1, potentially around $500M, and the resulting need for external capital, weigh on views of dilution risk and balance sheet flexibility.
Some see downside risk from potential additional share sales by major shareholders, which could pressure the stock and signal tempered confidence in near term value realization.
Limited conviction around securing a large contract with TVA in the near to medium term feeds skepticism on execution, project pipeline conversion, and the ability to justify current valuation levels.

What's in the News

U.S. and Japan sign a $550 billion energy framework, positioning ENTRA1 Energy, NuScale's exclusive global strategic partner, to receive up to $25 billion to develop a fleet of baseload power plants using NuScale SMR technology, including support for AI data centers and national defense (company announcement).
ENTRA1 Energy signs a landmark agreement with the Tennessee Valley Authority to develop up to 6 gigawatts of new clean baseload power using NuScale's SMR technology, underscoring NuScale's role in U.S. reindustrialization and decarbonization (company announcement).
NuScale files for a $750 million at-the-market follow-on equity offering of Class A common stock, reinforcing concerns about future capital needs and potential dilution (regulatory filing).
Shareholders approve an amendment to NuScale's Certificate of Incorporation at a December 16, 2025 special meeting, increasing authorized Class A common stock from 332 million to 662 million shares, expanding capacity for future equity issuance (special meeting results).
U.S. Department of Energy signals plans for the government to own as many as 10 large nuclear reactors funded in part by Japan's $550 billion commitment, boosting visibility for the broader nuclear ecosystem that includes NuScale (Bloomberg).

Valuation Changes

Fair Value Estimate reduced modestly from approximately $38.35 to $36.58 per share, reflecting tempered growth expectations and higher capital needs.
Discount Rate edged down slightly from about 9.09% to 8.95%, implying a marginally lower perceived risk profile in the updated model.
Revenue Growth revised down meaningfully from roughly 105.8% to 97.0%, signaling a more conservative outlook on the pace of top line expansion.
Net Profit Margin nudged up fractionally from around 11.80% to 11.82%, indicating a minor improvement in long term profitability assumptions.
Future P/E Multiple increased from about 155.3x to 167.9x, suggesting a higher valuation multiple being applied despite the slightly lower fair value estimate.

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.What are the underlying business or industry changes driving this perspective?

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 Earnings and Revenue Growth

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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