Shares of small nuclear reactor-builder Oklo (OKLO 0.61%) tumbled 3.1% through 12:10 p.m. ET Tuesday. Curiously, the news on Oklo today is good, not bad.
Cantor Fitzgerald initiated coverage of Oklo stock with an overweight rating and a $73 price target. No sooner had it done so than Oklo announced it has picked Kiewit Nuclear Solutions Co. to help build its first commercial Aurora powerhouse in Idaho, at Idaho National Laboratory (INL).
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What Cantor says about Oklo
Let's start with the initiation. As The Fly relates, Cantor is calling Oklo key to a global transition to safe nuclear energy. The company's small module reactor technology relies on "proven" fast fission reactors, which should help with Nuclear Regulatory Commission approvals. Cantor expects Oklo to become a "big winner" in the transition to nuclear energy.
Moving next to the INL announcement, Oklo says "pre-construction" work on its new reactor will begin later this year, and "commercial operations [are] targeted for late 2027 to early 2028." Importantly, Oklo also confirmed that it has secured access to the uranium fuel it will need to operate the reactor, and is making "regulatory progress" toward getting it design approved.
Is Oklo stock a buy?
And yet, investors don't seem to be buying the argument -- or the stock, at least not today. Why not?
Valuation's probably one concern. Oklo stock costs $9.2 billion, yet the company has neither profit not even revenue on which to hang a valuation. While analysts do expect revenue to begin in 2027, in line with the "commercial operations" forecast, profits won't arrive until 2030 at the earliest.
It's hard to value a stock with so many unknowns, lasting so many years into the future. And it's hard to call Oklo stock a buy because of this.
