NuScale Power (SMR) just shifted its small modular reactor program into production, signing a contract with Doosan Enerbility to manufacture upper reactor pressure vessel and coolant system components.
Against that contract backdrop, NuScale Power’s share price has jumped 10.04% over the past week after a 4.41% gain in the last session, yet the 30 day share price return is down 23.71% and the year to date share price return is down 63.70%. At the same time, the 1 year total shareholder return has declined 85.99%, so the recent momentum sits against a much tougher longer term record despite a very large 3 year total shareholder return of about 7x.
Scan beyond NuScale Power and compare this move into SMR component production with other potential nuclear infrastructure plays using the hand picked 16 nuclear energy infrastructure stocks
NuScale Power now has real hardware moving into production while the share price only recently bounced off a steep slide. Is this latest jump driven by business traction or short-term sentiment, and what does that imply for the next phase of valuation?
Most Popular Narrative: 94% Undervalued
NuScale Power closed at $5.92 while the most followed narrative pegs fair value at $100. This gap raises a clear question about whether the recent move reflects a reset in expectations or a mismatch between price and the long-term thesis.
Its my fudemental belief that retail has a strayed from real long-term value, and towards a perverse sentiment rooted purely in numbers. The market looked at NuScale's 2023 project cancellation and saw a failed company. That's the wrong frame. What actually happened is that a first-of-kind technology encountered the first regulatory hurdle and cost discovery, which is not a verdict on the technology, it's the expected friction of building something that has never been built at commercial scale before.
See why 38 investors see NuScale Power as 94% undervalued.
According to Delphic, the narrative assigns NuScale Power a fair value that is very large relative to the current share price, using a 9.69% discount rate and baking in forecast revenue growth of 123.88%. That view rests on the idea that SMR deployment is a long-cycle build out where early project friction and high upfront costs are a feature of the development curve rather than a verdict on the underlying technology.
Result: Fair Value of $100 (UNDERVALUED)
Still, two pressure points could flip that story for NuScale Power fast: further project setbacks and slower than expected customer adoption of SMR deployments.
Find out about the key risks to this NuScale Power narrative.
Next Steps
If this mix of optimism and concern around NuScale Power feels conflicted, that is the point. It is also why you should move quickly to review the 1 key reward and 3 important warning signs by weighing the 1 key reward and 3 important warning signs.
Looking for more investment ideas beyond NuScale Power?
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