Last Update 04 Nov 25

NuScale Power's analyst price target was adjusted downward, declining by $2.50 to $37.50 due to analyst concerns about Fluor's potential share sales, near-term contract uncertainty with TVA, and the need for additional capital despite recent commercial milestones.

Analyst Commentary

Analyst perspectives on NuScale Power remain highly divided, with contrasting outlooks shaping recent price target adjustments and ratings. Analysts continue to assess the company's commercial momentum, market positioning, and hurdles to execution as key factors determining the outlook for the stock.

Bullish Takeaways

Ongoing collaborations and recent agreements, such as a multi-gigawatt deployment commitment, demonstrate strong potential for substantial revenue growth and increase confidence in NuScale's ability to secure large-scale commercial contracts.
Bullish analysts see robust demand in the clean energy transition, viewing nuclear energy as well-positioned for renewed growth and highlighting NuScale's readiness to capitalize on this trend.
Successful validation of NuScale's small modular reactor technology by major industry partners supports higher estimates and upward price target revisions, underpinning a positive long-term growth narrative.
Scalability prospects for NuScale's partnership model offer upside potential if the company can deliver on project execution and secure new binding customer agreements.

Bearish Takeaways

Bearish analysts express concern over potential share sales by a major shareholder, which could exert downward pressure on the stock and contribute to a stretched valuation.
Uncertainty around the timing and likelihood of firm customer contracts, with specific reference to large U.S. utility partnerships, raises questions about near-term execution and revenue visibility.
Analysts note that, even with new commercial wins, NuScale may face significant capital requirements to finance project obligations and scale up operations, likely necessitating external funding.
Some remain cautious until there is more definitive proof of NuScale's scalability and a track record of moving from design approval to sustained customer demand and project realization.

What's in the News

NuScale Power's strategic partner, ENTRA1 Energy, is positioned to receive up to $25 billion in investment capital under a new $550 billion U.S.-Japan Framework Agreement to advance critical energy infrastructure and supply chains (Key Developments).
ENTRA1 Energy announced a landmark agreement with the Tennessee Valley Authority to deploy up to 6 gigawatts of NuScale SMR capacity. This is the largest SMR deployment program in U.S. history and supports the equivalent power needs of the Dallas-Fort Worth metropolitan area (Key Developments).
NuScale Power, LLC signed a Partnership Milestones Agreement with ENTRA1 Energy, committing up to $55 million in contributions for NuScale Power Modules in future ENTRA1 projects. The agreement includes performance-based disbursement milestones and a term extending as far as 2045 (Key Developments).
NuScale Power Corporation filed a $500 million follow-on equity offering of Class A Common Stock, structured as an at-the-market offering (Key Developments).

Valuation Changes

Consensus Fair Value Estimate remained stable at $40.84, indicating no recent change in analysts' core valuation assumptions.
Discount Rate increased slightly from 8.90% to 8.95%, reflecting a marginal rise in perceived risk or cost of capital.
Revenue Growth Expectation edged up from 107.59% to 107.76%, showing a minor increase in confidence around future sales expansion.
Net Profit Margin forecast improved from 10.56% to 11.35%, suggesting analysts anticipate stronger profitability in coming periods.
Future Price-to-Earnings (P/E) Ratio declined from 163.14x to 151.57x, indicating expectations of improved earnings relative to future share price or a more conservative market outlook.

NuScale's advanced SMR commercialization and partnerships position it well for accelerated revenue growth and immediate deployment in competitive energy markets.
Efficiency improvements and strategic focus on reducing expenses are expected to enhance profitability and support margin expansion.
Challenges in securing agreements, funding uncertainties, and potential supply chain issues threaten cash flow, earnings, and profitability, despite project advancements.

Catalysts

About NuScale Power

Provides small modular reactor technology solutions.What are the underlying business or industry changes driving this perspective?

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.
NuScale is advancing the manufacturing of long-lead materials for 12 modules, anticipating customer demand, which supports a smooth production ramp-up, reducing delivery times significantly, and potentially boosting future revenue and earnings.
Significant demand for nuclear energy, especially from AI-driven data centers like Microsoft and Meta, could lead to increased interest and order placements for NuScale’s SMR technology. This could materially increase future revenues as data centers triple their energy use by 2028.
NuScale's focus on reducing operating expenses, as noted by the substantial year-over-year decrease, could lead to improved net margins. Efficiency improvements transitioning from R&D to commercialization are likely to enhance profitability and support margin expansion.

NuScale Power Earnings and Revenue Growth

NuScale Power Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming NuScale Power's revenue will grow by 121.5% annually over the next 3 years.
Analysts are not forecasting that NuScale Power will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate NuScale Power's profit margin will increase from -368.8% to the average US Electrical industry of 10.5% in 3 years.
If NuScale Power's profit margin were to converge on the industry average, you could expect earnings to reach $42.2 million (and earnings per share of $0.12) by about April 2028, up from $-136.6 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 248.0x on those 2028 earnings, up from -13.0x today. This future PE is greater than the current PE for the US Electrical industry at 19.7x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.48%, as per the Simply Wall St company report.

NuScale Power Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The complexity and negotiation challenges of securing long-term power purchase agreements with prospective customers could delay revenue generation and impact cash flow projections.
The U.S. government grant-related uncertainties and the administrative process of securing additional funding highlight a possible risk to future liquidity and investment inflow, potentially affecting financial stability and development timelines.
Potential bottlenecks in the supply chain or manufacturing process for the small modular reactors, despite current advancements, could lead to increased operational costs and affect net margins.
The dependence on the successful commercialization of ENTRA1 Energy projects and the potential delays in customer acquisition for NuScale's long-lead modules pose a risk to revenue forecasts and earnings projections.
The ongoing regulatory approval process with the NRC for the power upgrade and overall project complexity may result in unanticipated expenses or timeline shifts, impacting future earnings and profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $24.46 for NuScale Power based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $29.0, and the most bearish reporting a price target of just $17.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $402.3 million, earnings will come to $42.2 million, and it would be trading on a PE ratio of 248.0x, assuming you use a discount rate of 7.5%.
Given the current share price of $13.91, the analyst price target of $24.46 is 43.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

SMR: Landmark US Nuclear Agreement Will Shape Commercialization Path Forward