Last Update 22 Jun 26

SMR: Regulatory Lead And ENTRA1 Partnership Will Drive Future Commercialization

The blended analyst price target for NuScale Power has moved slightly lower to $12, as analysts factor in the company's regulatory head start alongside ongoing timing and contract conversion risks highlighted in recent research updates.

Analyst Commentary

Recent research on NuScale Power highlights a mix of optimism around its regulatory position and technology, alongside caution about timing, revenue visibility, and contract execution. The blended analyst view feeds directly into how the stock is being valued and why the price target has been adjusted.

Bullish Takeaways

Bullish analysts point to NuScale Power's status as the only small modular reactor with U.S. Nuclear Regulatory Commission Standard Design Approval as a key support for valuation, arguing it gives the company a head start in customer discussions and project qualification.
The use of conventional low enriched uranium fuel is cited as a practical advantage that may lower perceived technology risk for utilities and governments, which supports long term project viability in analysts' models.
Regulatory progress is viewed as a credibility signal that could help NuScale Power convert interest into firm agreements over time, which bullish analysts see as important for future revenue growth.
Some research commentary describes NuScale Power as having a credibility lead versus peers in small modular reactors, which feeds into the view that the company could be well positioned when projects move toward final investment decisions.

Bearish Takeaways

Bearish analysts highlight that NuScale Power's revenue base is currently tied to services, which limits near term earnings visibility and can weigh on valuation multiples until hardware or project revenues develop.
Expectations that first reactor power is not anticipated until the early 2030s extend the timeline for potential cash flow, leading some analysts to lower price targets to reflect execution risk and a longer path to scaling.
Research commentary points to slower than anticipated conversion of agreements into firm deals, which raises questions about the pace of commercialization and supports more cautious target assumptions.
Several price target reductions indicate that analysts are factoring in project timing uncertainty and contract risk, keeping their ratings neutral despite NuScale Power's regulatory achievements.

What’s in the News for NuScale Power

Japan has committed over US$65b to U.S. small modular reactor projects, with up to US$25b earmarked for NuScale Power, to help build a U.S. SMR supply chain and support global deployment of NuScale reactors. Source: Japan Commits $65 Billion to U.S. Small Modular Reactor Projects Including $25 Billion for NuScale Power
NuScale Power awarded Paragon, a Mirion Technologies division, a contract to complete final design work and safety validation for its Highly Integrated Protection System. This is a step that supports its NRC certified SMR technology and commercial deployment plans. Source: NuScale Power Awards Paragon Key Contract, Shares Surge on Safety and Deployment Progress
Recent coverage highlights that NuScale Power’s stock has fallen over 75% from recent highs. This reflects investor focus on execution risk, lack of firm sales, and ongoing losses, even as the company pursues projects in Romania and with the Tennessee Valley Authority. Source: NuScale Power’s Small Modular Reactor Stock Slumps Amid Growth Prospects and Commercial Challenges
South Korea plans to build its first SMR alongside two new large reactors. Doosan Enerbility will supply reactor equipment to NuScale Power, reinforcing industrial ties between the companies. Source: S.Korea to build 2 new reactors, 1st SMR; Moves signify nuclear revival, meet AI power demand
NuScale Power opened its 12th Energy Exploration Center at the University of Virginia’s College at Wise. This adds to a global network of training sites and supports nuclear workforce development tied to its SMR technology. Source: NuScale Power Opens 12th Energy Exploration Center at UVA Wise to Advance SMR Nuclear Workforce

Valuation Changes for NuScale Power

Fair Value: The model fair value remains unchanged at $15.36. This indicates no adjustment in the core valuation estimate for NuScale Power in this update.
Discount Rate: The discount rate has risen slightly from 9.42% to 9.43%, a small increase that makes future cash flows marginally less valuable in the model.
Revenue Growth: The forecast revenue growth assumption is effectively unchanged at 175.37%, suggesting no alteration to the high growth expectations used in the valuation framework.
Net Profit Margin: The assumed net profit margin has risen slightly from 10.95% to 10.97%, indicating a modestly higher long run profitability assumption in the model for NuScale Power.
Future P/E: The future P/E multiple has edged slightly lower from 199.36x to 199.14x, reflecting a very small reduction in the valuation multiple applied to projected earnings.

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Key Takeaways

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 175.4% 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 -2066.5% to the average US Electrical industry of 11.0% in 3 years.
If NuScale Power's profit margin were to converge on the industry average, you could expect earnings to reach $42.8 million (and earnings per share of $0.1) by about June 2029, up from -$385.8 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 199.6x on those 2029 earnings, up from -10.5x today. This future PE is greater than the current PE for the US Electrical industry at 39.7x.
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 9.43%, as per the Simply Wall St company report.

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 $15.36 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 $25.0, and the most bearish reporting a price target of just $7.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $389.8 million, earnings will come to $42.8 million, and it would be trading on a PE ratio of 199.6x, assuming you use a discount rate of 9.4%.
Given the current share price of $11.74, the analyst price target of $15.36 is 23.6% 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.

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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