NuScale Power (SMR): Reassessing Valuation After a Sharp Multi‑Month Share Price Slide

NuScale Power (SMR) has been on a rough slide, with the stock down about 27% this month and roughly 66% over the past 3 months, even as revenue growth remains strong.

See our latest analysis for NuScale Power.

The latest slide comes after a sharp run up in prior years, with NuScale still sitting on a solid three year total shareholder return despite the recent weak share price momentum and concerns about execution risk resurfacing.

If NuScale’s volatility has you rethinking your exposure to infrastructure names, this could be a good moment to explore aerospace and defense stocks for other long term growth stories.

With shares now trading well below consensus price targets despite rapid top line growth and heavy losses, is NuScale a misunderstood clean energy play at a steep discount, or is the market already pricing in all the future upside?

Most Popular Narrative: 58.8% Undervalued

With NuScale Power last closing at $15.79 against a narrative fair value near $38, the gap hinges on aggressive growth and long term margin expansion.

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.

It may seem surprising that a loss making nuclear innovator is assigned a relatively high future multiple, even after target cuts. The explanation lies in the projected growth, scale, and margins that underpin this valuation framework.

Result: Fair Value of $38.35 (UNDERVALUED)

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

However, slipping timelines on firm utility orders and potential equity dilution to fund ENTRA1 commitments could quickly erode today’s perceived valuation upside.

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

Another View: Market Signals a Very Different Story

Our SWS DCF model paints a far more cautious picture, suggesting NuScale’s fair value is closer to $3.30, meaning the stock looks significantly overvalued on a cash flow basis. If growth or margins fall short, could today’s price leave little room for error?

Look into how the SWS DCF model arrives at its fair value.

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 918 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 see NuScale’s story differently or want to dig into the numbers yourself, you can build a personalized view in under three minutes: 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.

Ready for more high conviction ideas?

Before you move on, give yourself an edge by scanning fresh opportunities on Simply Wall Street’s Screener so you are not relying on just one story.

• Capture early stage potential by reviewing these 3629 penny stocks with strong financials with the balance sheets to back up their growth ambitions.
• Target tomorrow’s innovation leaders by assessing these 24 AI penny stocks poised to benefit from accelerating AI adoption.
• Lock in income and stability by focusing on these 13 dividend stocks with yields > 3% that can strengthen total returns through regular cash payouts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com