NuScale Power (SMR) Stock Surges 300% in 2023: Analyzing the Nuclear Energy Boom

NuScale Power (SMR) Soars 17.5%: Is Further Upside Left in the Stock?

NuScale Power Corporation SMR shares rallied 17.5% in the last trading session to close at $15.34. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 55.1% gain over the past four weeks. The increase in share price can be attributed to the swelling demand for energy especially safe and clean energy. Last week, President Joe Biden signed a new bill that supports the development of advanced nuclear technology by lowering processing fees and licensing times. This is likely to benefit NuScale. Based in Portland, OR, NuScale specializes in providing innovative advanced nuclear small modular reactor ("SMR") technology. NuScale has the first-mover advantage in the commercial SMR development space as it is the first and only company to have received U.S. Nuclear Regulatory Commission design approval and certification. The efforts to commercialize its SMR technology bode well. Energy demand is soaring owing to higher power usage by data centers and AI, major industrial projects, transportation and utility sectors. This is likely to drive the company's top-line performance, going ahead. The company is also focusing on cost discipline. In January 2024, it announced a cost reduction plan that will likely generate $50-$60 million in annualized savings, beginning in the second quarter of 2024. NuScale ended the first quarter with cash and equivalents (including restricted cash of $5.1 million) of $137.1 million and no debt. This company is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $1.43 million, down 75.3% from the year-ago quarter. While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. For NuScale Power, the consensus EPS estimate for the quarter has been revised 21.4% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on SMR going forward to see if this recent jump can turn into more strength down the road. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> NuScale Power belongs to the Zacks Electronics - Power Generation industry. Another stock from the same industry, Generac Holdings GNRC, closed the last trading session 3.7% higher at $153.94. Over the past month, GNRC has returned 9%. For Generac Holdings, the consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $1.24. This represents a change of +14.8% from what the company reported a year ago. Generac Holdings currently has a Zacks Rank of #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NuScale Power Corporation (SMR) : Free Stock Analysis Report Generac Holdings Inc. (GNRC) : Free Stock Analysis Report The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

NuScale Power (SMR) Soars 17.5%: Is Further Upside Left in the Stock?

NuScale Power Corporation SMR shares rallied 17.5% in the last trading session to close at $15.34. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 55.1% gain over the past four weeks. The increase in share price can be attributed to the swelling demand for energy especially safe and clean energy. Last week, President Joe Biden signed a new bill that supports the development of advanced nuclear technology by lowering processing fees and licensing times. This is likely to benefit NuScale. Based in Portland, OR, NuScale specializes in providing innovative advanced nuclear small modular reactor ("SMR") technology. NuScale has the first-mover advantage in the commercial SMR development space as it is the first and only company to have received U.S. Nuclear Regulatory Commission design approval and certification. The efforts to commercialize its SMR technology bode well. Energy demand is soaring owing to higher power usage by data centers and AI, major industrial projects, transportation and utility sectors. This is likely to drive the company's top-line performance, going ahead. The company is also focusing on cost discipline. In January 2024, it announced a cost reduction plan that will likely generate $50-$60 million in annualized savings, beginning in the second quarter of 2024. NuScale ended the first quarter with cash and equivalents (including restricted cash of $5.1 million) of $137.1 million and no debt. This company is expected to post quarterly loss of $0.13 per share in its upcoming report, which represents no change from the year-ago quarter. Revenues are expected to be $1.43 million, down 75.3% from the year-ago quarter. While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. For NuScale Power, the consensus EPS estimate for the quarter has been revised 21.4% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on SMR going forward to see if this recent jump can turn into more strength down the road. The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> NuScale Power belongs to the Zacks Electronics - Power Generation industry. Another stock from the same industry, Generac Holdings GNRC, closed the last trading session 3.7% higher at $153.94. Over the past month, GNRC has returned 9%. For Generac Holdings, the consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $1.24. This represents a change of +14.8% from what the company reported a year ago. Generac Holdings currently has a Zacks Rank of #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NuScale Power Corporation (SMR) : Free Stock Analysis Report Generac Holdings Inc. (GNRC) : Free Stock Analysis Report The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This Hot Nuclear Stock Is Up 300% This Year: Where Will It Land by the End of 2024?

Investors are going like gangbusters for artificial intelligence (AI) stocks such as Nvidia and Microsoft, bidding them up to all-time highs. Now, they are looking at the second-order effects of AI, one of which is data center power consumption. These new AI tools require tons of new infrastructure and electricity generation capacity, which has investors interested in stodgy old utility and energy stocks again. The stock of the small modular nuclear reactor start-up NuScale Power (NYSE: SMR) is up 300% year to date on the back of this theme. But what are small nuclear reactors, and should you invest in them? Let's take a closer look. Small modular reactors and energy demand Small modular reactors (SMRs) are just what their name implies. Unlike legacy nuclear reactors of immense size, SMR companies want to build smaller power sources that are more flexible for commercial customers. NuScale Power is one of the developers of this technology with its NuScale Power Module. Its modules are only 76 feet tall and can generate 77 megawatts (MW) of electricity. For comparison, the recent large-scale nuclear plant that opened in Georgia generates 2,234 MW of electricity. NuScale believes SMRs are better for commercial customers because they don't require tens of billions in up-front costs, like legacy nuclear reactor projects. It aims to sell its SMRs to commercial utilities. For example, it has a contract with a Polish company, KGHM Polska Miedz, to repurpose coal power plants. This can be better for the environment and theoretically save on costs if done efficiently. But why is NuScale stock up so much this year? One answer: AI. The rise of AI tools like ChatGPT is driving electricity demand, which theoretically will drive demand for SMRs from NuScale. Global data center power consumption is expected to more than double to 1,000 terawatt-hours in 2026 from 460 in 2022. That electricity will have to come from somewhere. Are SMRs actually better? The problem with SMRs and NuScale Power is that the company will not have any reactors on line until 2026 at the earliest. Building nuclear reactors is a slow process and requires a ton of regulatory paperwork, especially in the United States. For example, with Polska, the timeline on the contract is for SMRs to be deployed by 2029 at the earliest. Other projects will not be completed (and therefore drive revenue) for NuScale Power until much later. How exactly will this take advantage of the present jump in electricity demand? SMRs are also seeing the same cost overhangs as traditional nuclear. At a Utah project that was recently terminated, NuScale originally wanted 12 modular reactors generating 600MW each by 2023. It expected this to cost $3 billion. In 2018, this capacity was revised down to 60MW. Delays continued, and the total cost was pushed to an estimate of over $9 billion, which caused the project to be canceled. During the same time, the large-scale Vogtle 3 & 4 nuclear plants were completed in Georgia and will generate a consistent 2,234MW of power for utilities. These projects aren't immune from cost overruns. The Vogtle plants were initially scheduled to start operations in 2016 and at half the actual project cost. But, at least they got completed. If SMRs projects can't actually be built, what is the point of NuScale Power? NuScale's situation looks even worse when you crack open its financial statements. It is pre-revenue and burning over $100 million in cash a year. Since it only had $131 million in cash on its balance sheet as of the end of its last quarter, the company has about a year of runway left -- while its projects won't come on line until the end of the decade under the best-case scenario. In order to fund itself, NuScale will need to continue to sell its common stock. Over the last three years, shares outstanding are up over 100%. This trend is diluting shareholders and will only get worse. A bull case for the stock is hard to make, unless you expect the company to pull off a technological miracle sometime soon. Even though shares are up 300% so far in 2024 and could rise more by year's end, investors should stay far away from NuScale Power and any other SMR stock riding the AI electricity-demand narrative. There is no reason to buy this stock in 2024. Should you invest $1,000 in NuScale Power right now? Before you buy stock in NuScale Power, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and NuScale Power wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $791,929!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends NuScale Power and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This Hot Nuclear Stock Is Up 300% This Year: Where Will It Land by the End of 2024? | The Motley Fool

Investors are betting that small modular reactors will benefit from the artificial intelligence boom. Investors are going like gangbusters for artificial intelligence (AI) stocks such as Nvidia and Microsoft, bidding them up to all-time highs. Now, they are looking at the second-order effects of AI, one of which is data center power consumption. These new AI tools require tons of new infrastructure and electricity generation capacity, which has investors interested in stodgy old utility and energy stocks again. The stock of the small modular nuclear reactor start-up NuScale Power (SMR 3.06%) is up 300% year to date on the back of this theme. But what are small nuclear reactors, and should you invest in them? Let's take a closer look. Small modular reactors (SMRs) are just what their name implies. Unlike legacy nuclear reactors of immense size, SMR companies want to build smaller power sources that are more flexible for commercial customers. NuScale Power is one of the developers of this technology with its NuScale Power Module. Its modules are only 76 feet tall and can generate 77 megawatts (MW) of electricity. For comparison, the recent large-scale nuclear plant that opened in Georgia generates 2,234 MW of electricity. NuScale believes SMRs are better for commercial customers because they don't require tens of billions in up-front costs, like legacy nuclear reactor projects. It aims to sell its SMRs to commercial utilities. For example, it has a contract with a Polish company, KGHM Polska Miedz, to repurpose coal power plants. This can be better for the environment and theoretically save on costs if done efficiently. But why is NuScale stock up so much this year? One answer: AI. The rise of AI tools like ChatGPT is driving electricity demand, which theoretically will drive demand for SMRs from NuScale. Global data center power consumption is expected to more than double to 1,000 terawatt-hours in 2026 from 460 in 2022. That electricity will have to come from somewhere. The problem with SMRs and NuScale Power is that the company will not have any reactors on line until 2026 at the earliest. Building nuclear reactors is a slow process and requires a ton of regulatory paperwork, especially in the United States. For example, with Polska, the timeline on the contract is for SMRs to be deployed by 2029 at the earliest. Other projects will not be completed (and therefore drive revenue) for NuScale Power until much later. How exactly will this take advantage of the present jump in electricity demand? SMRs are also seeing the same cost overhangs as traditional nuclear. At a Utah project that was recently terminated, NuScale originally wanted 12 modular reactors generating 600MW each by 2023. It expected this to cost $3 billion. In 2018, this capacity was revised down to 60MW. Delays continued, and the total cost was pushed to an estimate of over $9 billion, which caused the project to be canceled. During the same time, the large-scale Vogtle 3 & 4 nuclear plants were completed in Georgia and will generate a consistent 2,234MW of power for utilities. These projects aren't immune from cost overruns. The Vogtle plants were initially scheduled to start operations in 2016 and at half the actual project cost. But, at least they got completed. If SMRs projects can't actually be built, what is the point of NuScale Power? NuScale's situation looks even worse when you crack open its financial statements. It is pre-revenue and burning over $100 million in cash a year. Since it only had $131 million in cash on its balance sheet as of the end of its last quarter, the company has about a year of runway left -- while its projects won't come on line until the end of the decade under the best-case scenario. In order to fund itself, NuScale will need to continue to sell its common stock. Over the last three years, shares outstanding are up over 100%. This trend is diluting shareholders and will only get worse. A bull case for the stock is hard to make, unless you expect the company to pull off a technological miracle sometime soon. Even though shares are up 300% so far in 2024 and could rise more by year's end, investors should stay far away from NuScale Power and any other SMR stock riding the AI electricity-demand narrative. There is no reason to buy this stock in 2024.