Stock Analysis

NuScale Power Corporation (NYSE:SMR) Just Reported, And Analysts Assigned A US$13.50 Price Target

NYSE:SMR
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NuScale Power Corporation (NYSE:SMR) just released its latest first-quarter report and things are not looking great. Statutory earnings fell substantially short of expectations, with revenues of US$5.5m missing forecasts by 62%. Losses exploded, with a per-share loss of US$0.16 some 89% below prior forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for NuScale Power

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NYSE:SMR Earnings and Revenue Growth May 13th 2023

Taking into account the latest results, the most recent consensus for NuScale Power from four analysts is for revenues of US$100.7m in 2023 which, if met, would be a huge 577% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching US$0.50 per share. Before this earnings announcement, the analysts had been modelling revenues of US$99.6m and losses of US$0.41 per share in 2023. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 11% to US$13.50, with the analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on NuScale Power, with the most bullish analyst valuing it at US$18.00 and the most bearish at US$9.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting NuScale Power's growth to accelerate, with the forecast 12x annualised growth to the end of 2023 ranking favourably alongside historical growth of 220% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that NuScale Power is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at NuScale Power. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of NuScale Power's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for NuScale Power going out to 2025, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 4 warning signs for NuScale Power you should be aware of, and 1 of them shouldn't be ignored.

Valuation is complex, but we're helping make it simple.

Find out whether NuScale Power is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.

About NYSE:SMR

NuScale Power

NuScale Power Corporation engages in the development and sale of modular light water reactor nuclear power plants to supply energy for electrical generation, district heating, desalination, hydrogen production, and other process heat applications.

Excellent balance sheet and slightly overvalued.