NuScale Power's share price dropped by 31% in the past month.
NuScale Power, a company known for its small modular reactor (SMR) technology, is making waves in the energy sector with several projects in the pipeline. One of these potential projects involves a proposal from the Tennessee Valley Authority (TVA). However, the company's uncertain future and high valuation without current revenue are causing concerns for potential investors.
The stock price of NuScale Power has seen volatility, with a 52-week range of $6.88 - $53.50. Despite a significant increase of 432% in the last year, the day's range stands at $38.54 - $43.05. The company's stock symbol is SMR on the NYSE, and at the time of writing, it is trading at $40.27.
NuScale Power's financial situation is a cause for concern, as the company is burning cash and not expected to generate revenue for years due to the long project life for nuclear energy developments. This, coupled with a market cap of $11.5 billion and minimal revenue, makes the company's valuation risky. The market cap does not have a fundamental basis to support it, further adding to the uncertainty.
The company's only SMR design to be approved by the Nuclear Regulatory Commission (NRC) is yet to be deployed in the real world, despite numerous discussions since its inception. The success of its energy projects is not guaranteed to significantly impact its revenue, and the long-term projects may not guarantee significant revenue generation.
Besides a potential contract with a Romanian power company, NuScale Power is currently in customer contract negotiations with a utility in the United States. However, the success of these negotiations remains to be seen.
Given the company's uncertain future and high valuation without current revenue, experts advise investors to avoid putting NuScale Power in their portfolios. The company's shares fell 31% in August, underscoring the volatility of its stock price.
In conclusion, while NuScale Power is making strides in the energy sector, its financial situation and uncertain future make it a risky investment for potential investors.
