Oklo (OKLO 4.58%) stock tumbled 6.4% through 10:20 a.m. ET Tuesday after Wolfe Research analyst Steve Fleishman initiated coverage on small modular nuclear reactor company with a "peerperform" (i.e., hold) rating and a fair valuation of about $61.
That's not much more than the $58.56 per share at which Oklo closed last night, which explains why investors might be a little upset with Oklo this morning.
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What Wolfe thinks about Oklo
This is not to say Wolfe had anything truly bad to say about Oklo. As noted on StreetInsider.com this morning, Wolfe highlighted Oklo's political ties to the Trump Administration as a mark in its favor, as well as its plan to put its first commercial-scale Gen IV nuclear power plant in service in 2028 -- a sodium-cooled fast reactor using HALEU nuclear fuel -- before most of its competitors are up and running.
Wolfe calls this timeline "ambitious," but says it has "potential if achieved."
Wolfe also likes the company's vertical integration, with plans to build, own, and operate its own nuclear plants, rather than just license technology or sell modules to customers, even as Oklo ventures into new fields to produce nuclear fuel for sale to third parties.
NYSE: OKLO
Key Data Points
Is Oklo stock a good bet?
What worries Wolfe is that trying to do so many things at once will be expensive for Oklo, which has had to sell $3.5 billion in stock over the past year to keep itself in business, remains "pre-revenue," and might not be profitable if it cannot keep its costs in check.
Even assuming all goes well, and Oklo builds everything it's promised to build over the next 15 years, the stock could be worth anywhere from $51 to $71 a share, says Wolfe. Meaning Oklo... could already be overvalued today.
