Last Update 05 Jun 26

Fair value Decreased 6.93%

SMR: ENTRA1 Deal Progress And Liquidity Position Will Drive Commercialization

Analysts have lowered their average fair value estimate for NuScale Power from $16.50 to about $15.36, citing more cautious expectations for revenue growth, profit margins, and the timing of project conversions, even as the company maintains a regulatory head start in small modular reactors.

Analyst Commentary

Recent Street research on NuScale Power has focused on how its regulatory position, commercialization timeline, and contract execution feed into valuation and risk. Price targets have been reset lower across several firms, while commentary continues to highlight both competitive strengths and practical hurdles to turning the project pipeline into revenue.

Bullish Takeaways

Bullish analysts point to NuScale's status as the only small modular reactor design with U.S. Nuclear Regulatory Commission Standard Design Approval as a key support for the stock's credibility and potential long term project funnel.
The use of conventional low enriched uranium fuel is viewed as reducing technical and regulatory complexity, which some expect to help execution and lower perceived technology risk compared with less proven reactor concepts.
The recent reinstatement of coverage with a Neutral stance and a US$12 price target suggests that, even after fair value reductions, some analysts still see room for the business model to be validated as the technology progresses.
Analysts who are more constructive argue that a clear regulatory head start versus peers could help NuScale secure contracts when customers decide on vendors for future small modular reactor projects.

Bearish Takeaways

Bearish analysts have trimmed price targets, indicating concern that earlier expectations around valuation may have been too optimistic given current visibility on revenue, profitability, and contract timing.
Several firms describe slower than anticipated conversion of preliminary agreements into firm contracts, which increases execution risk and raises questions about the pace at which NuScale can scale revenue.
With first reactor power not expected until the early 2030s, NuScale's cash generation profile remains distant, which some analysts see as a headwind for the stock, especially with revenues currently tied mainly to services.
Multiple price target cuts across research providers suggest that the market is still recalibrating expectations around growth, which may keep sentiment cautious until there is clearer evidence of project conversion and revenue traction.

What's in the News

NuScale is advancing what is described as Europe’s first commercial SMR project in Romania. The project has reached the Final Investment Decision stage and is targeting operation around 2030, highlighting the company’s progress in moving from design approval toward deployment. (Source: "NuScale Power Advances Europe’s First SMR Project Amid Market Challenges and Growth Potential")
The company is working on a potential 6 gigawatt SMR deployment with the Tennessee Valley Authority and ENTRA1 Energy. This could become one of the largest SMR projects in U.S. history, with negotiations toward a definitive power purchase agreement expected to continue through 2026. (Source: "NuScale Power Advances SMR Commercialization with Landmark 6GW TVA Deal Amid Financial Challenges")
NuScale reports liquidity above US$1b, continues to operate at a loss with limited current revenue, and may need additional fundraising to support its SMR rollout. This underlines the long development runway and funding demands for investors to watch. (Sources: "NuScale Power Advances SMR Commercialization with Landmark 6GW TVA Deal Amid Financial Challenges", "NuScale Power Advances Europe’s First SMR Project Amid Market Challenges and Growth Potential")
The company is sharpening its pitch to energy intensive customers, including AI data centers and petrochemical plants, through partnerships with Framatome for fuel fabrication and Ebara Elliott Energy for high temperature steam compressors that pair NuScale modules with industrial process heat. (Sources: "NuScale Power Advances SMR Commercialization with Landmark 6GW TVA Deal Amid Financial Challenges", "NuScale Power Advances Europe’s First SMR Project Amid Market Challenges and Growth Potential")
NuScale has opened a new Operations Center in Houston’s CityCentre to be closer to petrochemical, data center, and grid customers, aiming to improve project execution and coordination as it builds out its SMR pipeline. (Source: Key Developments, Business Expansions)

Valuation Changes

Fair Value: The average fair value estimate has fallen slightly from $16.50 to about $15.36 per share.
Discount Rate: The discount rate used in analyst models has edged lower from 9.70% to about 9.42%.
Revenue Growth: Assumed long term revenue growth has been trimmed from roughly 186.03% to about 175.37%, still implying very large projected expansion off a low base.
Net Profit Margin: Forecast net profit margin has eased from about 11.20% to around 10.95%.
Future P/E: The future P/E multiple has risen slightly from about 188.36x to roughly 199.36x.

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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.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 175.4% 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 -2066.5% to the average US Electrical industry of 11.0% in 3 years.
If NuScale Power's profit margin were to converge on the industry average, you could expect earnings to reach $42.7 million (and earnings per share of $0.1) by about June 2029, up from -$385.8 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 199.8x on those 2029 earnings, up from -10.8x today. This future PE is greater than the current PE for the US Electrical industry at 39.7x.
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 9.42%, as per the Simply Wall St company report.

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 $15.36 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 $25.0, and the most bearish reporting a price target of just $7.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $389.8 million, earnings will come to $42.7 million, and it would be trading on a PE ratio of 199.8x, assuming you use a discount rate of 9.4%.
Given the current share price of $12.0, the analyst price target of $15.36 is 21.9% 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.

SMR: Landmark US Nuclear Agreement Will Shape Commercialization Path Forward