NuScale Power (SMR): Examining Valuation After Recent Unexplained Share Price Surge

If you’ve been watching NuScale Power (NYSE:SMR) lately, the company’s recent 5% one-day jump may have given you pause. With no headlines or significant events hitting the wires, it’s the kind of spike that prompts investors to look for hidden catalysts or shifts in sentiment. This could be a potential signal for where the stock might be headed next.

The move comes against a backdrop of considerable volatility for NuScale Power this year. Shares have soared nearly 98% since January and are now up over 200% for the year, erasing losses from last month’s slide and reversing what was a prolonged period of weakness. A yearly return above 200% is hard to ignore, especially as recent momentum has accelerated after a 16% gain in the past 3 months, even though the last month saw a sharp decline.

With swings like these and no major news event as the obvious driver, some investors may be wondering whether NuScale Power is quietly becoming undervalued, or if the market is starting to price in years of future growth.

Most Popular Narrative: 14% Undervalued

According to community narrative, NuScale Power is currently considered undervalued, with expectations for significant future revenue and margin expansion. This perspective focuses on rapid commercialization potential, efficiency improvements, and demand from emerging sectors.

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.

Curious about the numbers behind this bullish narrative? The projected pace of revenue growth, improvements in operating margins, and shifting profit dynamics all drive the calculation. Interested in which ambitious forecasts support a valuation premium over today’s price? Explore the assumptions behind this attention-grabbing fair value estimate.

Result: Fair Value of $40.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts. However, ongoing regulatory hurdles and potential delays in securing customer agreements could disrupt NuScale Power’s growth trajectory and undermine current optimistic valuations. Find out about the key risks to this NuScale Power narrative.

Another View: Multiples Tell a Different Story

Looking from a different perspective, our valuation using a common multiple indicates that NuScale Power is priced higher than its peers in the US industry. This challenges the notion that the stock is currently undervalued. Is it possible that the price already accounts for all the optimism?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out NuScale Power for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own NuScale Power Narrative

If you would like to see things from a different angle or want to dig deeper yourself, you have the tools to build your own story in just a few minutes. So why not do it your way?

A great starting point for your NuScale Power research is our analysis highlighting 1 key reward and 3 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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