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On Friday, TD Cowen analysts maintained a Buy rating on NuScale Power (NYSE:SMR) shares, a company whose stock has delivered an impressive 298% return over the past year. According to InvestingPro analysis, the company appears slightly undervalued at current levels. The firm’s analysts highlighted the growing importance of nuclear power in achieving decarbonization and energy security objectives. Small Modular Reactors (SMRs), according to TD Cowen, are expected to constitute a substantial portion of new nuclear construction, and NuScale Power is at the forefront of this emerging industry.
NuScale Power has made significant strides in the development of SMRs, having secured considerable investment and approvals from the Nuclear Regulatory Commission (NRC). The company maintains strong financial flexibility with a current ratio of 5.25, indicating robust liquidity to fund its operations. These advancements position the company as an early leader in the SMR market, which is anticipated to expand as the global demand for clean and secure energy sources intensifies. InvestingPro data reveals impressive revenue growth of 62.4% in the last twelve months, along with remarkable gross margins of 86.7%.
The analysts at TD Cowen expressed their outlook on the company’s future, stating, "We see the need for significant increases in nuclear power to achieve decarbonization and energy security goals, and we believe Small Modular Reactors will represent a meaningful share of new nuclear construction." This statement underscores the analysts’ confidence in the role of SMRs and NuScale Power’s potential within the industry.
Despite the promising prospects, TD Cowen also noted that for NuScale Power to maintain its trajectory, the company will need to expedite customer acquisition and cash inflows. This acceleration is necessary to balance the company’s diminishing liquidity and ensure sustained growth and development in the competitive nuclear power market. For deeper insights into NuScale Power’s financial health and growth prospects, InvestingPro subscribers can access comprehensive Pro Research Reports, which include detailed analysis of the company’s competitive position and future potential among 1,400+ top US stocks.
NuScale Power’s journey in the nuclear sector is closely watched by investors and industry experts alike, as the company continues to navigate the challenges and opportunities presented by the global shift towards cleaner energy solutions. The endorsement from TD Cowen reinforces the belief in NuScale Power’s capabilities and its role in the future of nuclear energy.
In other recent news, NuScale Power Corp reported a significant increase in revenue for the fourth quarter of 2024, reaching $34.2 million, far exceeding the forecasted $5.63 million. Despite this impressive revenue growth, the company recorded a net loss of $180.3 million, which included a substantial $170 million non-cash expense. Analysts from firms like Canaccord Genuity noted these financial results, highlighting the company’s robust revenue performance but also the impact of non-cash expenses on its net income. NuScale is advancing its small modular reactor (SMR) technology and expanding production capabilities, with plans to capitalize on the growing demand for clean energy solutions.
The company maintains a strong cash position, ending the year with $446.7 million, which is a significant increase from $125.4 million at the end of 2023. This financial stability is supported by warrant conversions that generated significant proceeds. Looking forward, NuScale aims to expand its presence in the data center and industrial electrification markets, with expectations for future revenue growth to reach $52 million by the fiscal year 2025. The company is also pursuing power purchase agreements and anticipates receiving regulatory approval for a power upgrade by mid-2025. These developments underscore NuScale’s strategic focus on leveraging its NRC-approved SMR technology to meet the increasing demand for reliable, carbon-free power.
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