Editor's note: On Feb. 13, World Nuclear News reported that "The shareholders of Romanian nuclear operator Nuclearelectrica have approved the Final Investment Decision for the small modular reactor project in Doicești." An earlier version of this article missed that development.
NuScale Power (SMR 2.22%), a developer of small modular reactors (SMRs), went public through a 2022 merger with a special purpose acquisition company (SPAC). Its stock open at $10.70, surged to a record high of $53.43 last October, but now trades at about $14.
NuScale is a divisive investment because it hasn't actually sold any reactors yet. Instead, much of its future growth potential has already been priced into its market capitalization of $4.04 billion -- which values the company at 40 times its 2026 sales. Will NuScale grow into its premium valuations over the next ten years?
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How does NuScale generate revenue?
NuScale's SMRs can be installed in vessels that are only 65 feet high and nine feet wide. They're prefabricated and assembled on-site in a modular manner to reduce the time, labor, and costs required to construct a nuclear power plant.
NuScale is the only SMR maker that holds Standard Design Approvals (SDAs) from the U.S. Nuclear Regulatory Commission (NRC), which approved its 50 MWe design in 2023 and its 77 MWe design last year. It once planned to deploy six 77 MWe reactors in Idaho to construct a 462 MWe plant, but that ambitious project collapsed amid skyrocketing costs in 2023.
Today, NuScale generates most of its revenue as a subcontractor for Fluor (FLR 3.36%) in the planned construction of a similar 462 MWe plant for Romania's RoPower.
NYSE: SMR
Key Data Points
Where will NuScale's stock be in 10 years?
NuScale's sales could soar over the next decade as two catalysts kick in. First, its RoPower project could finally enter the deployment phase. Second, it recently agreed to deploy up to six gigawatts of its SMR capacity across seven states for the Tennessee Valley Authority (TVA).
NuScale originally planned to deploy its first SMRs in Romania by 2027-2028. But it postponed that launch date to 2030, and some analysts don't expect those reactors to come online until 2033-2034. In the U.S., its first TVA reactors probably won't be installed until 2032.
Until the end of the decade, most of NuScale's revenue will likely still come from its FEED study fees in Romania. It will likely remain unprofitable and continue to dilute its shares with secondary offerings. Its stock could skyrocket by 2036 if it successfully activates its first reactors in Romania and the U.S. -- but it will remain a speculative play for the foreseeable future.
