Assessing NuScale Power’s Valuation Following Historic U.S. SMR Project Breakthrough

NuScale Power (NYSE:SMR) is making headlines after announcing a project with the Tennessee Valley Authority and ENTRA1 Energy to deploy up to 6 gigawatts of its small modular reactor technology. This collaboration represents the largest SMR commitment yet in the United States, and it has potential implications for the company’s role in a changing energy landscape.

See our latest analysis for NuScale Power.

This announcement comes amid a wave of industry activity and new leadership at NuScale, with a new Chief Legal Officer joining and a major SMR deployment just unveiled. The momentum can be seen in the company’s recent stock performance, with a 24% 7-day share price return and a year-to-date share price return of nearly 144%. Over the past three years, NuScale’s total shareholder return exceeds 279%, suggesting that optimism is not limited to the short term.

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Given the rapid share price gains and the unprecedented SMR deal, is NuScale Power still undervalued? Or have investors already accounted for future growth, leaving little room for further upside?

Most Popular Narrative: 5.7% Overvalued

NuScale Power’s narrative fair value lands just below the latest share price, suggesting the market may be placing a premium on its future prospects. The following excerpt captures the driving force behind this outlook.

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.

Read the complete narrative.

Want to know the blueprint fueling this bold price tag? The narrative bets on breakneck revenue growth, rapid commercialization, and margin leapfrogging, driven by assumptions you would not expect. Tempted to see the surprise levers behind such a dramatic valuation? Only the full narrative reveals the audacious forecasts that shape this target.

Result: Fair Value of $40.84 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lingering uncertainty about securing long-term contracts and potential funding challenges could quickly reshape NuScale Power's growth outlook and projected valuations.

Find out about the key risks to this NuScale Power narrative.

Build Your Own NuScale Power Narrative

If you want to chart your own course and see if your outlook differs, you can dive in and shape a personal narrative in just a few minutes. Do it your way

A great starting point for your NuScale Power research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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