Oklo stock rating initiated with Buy at H.C. Wainwright

On Wednesday, H.C. Wainwright initiated coverage on Oklo Inc. (NYSE: OKLO), a company specializing in advanced nuclear technology, with a Buy rating and a price target of $55.00. Trading at $21.53, the stock has significant upside potential according to analysts, with targets ranging from $30 to $58. InvestingPro analysis indicates the stock is currently overvalued relative to its Fair Value, though it maintains a strong buy consensus among analysts. The firm highlighted Oklo’s focus on small modular reactors and its capability to use recycled fuel in its operations.

Oklo, headquartered in Santa Clara, California, is in the business of designing and developing next-generation fast fission power plants branded as Aurora. With a market capitalization of nearly $3 billion, the company aims to construct, own, and operate these powerhouses, offering the electricity produced to a variety of customers including data centers, national defense, and utility companies, primarily within the U.S. market. InvestingPro data reveals the company maintains a strong balance sheet with more cash than debt, though it’s currently not profitable.

The technology underpinning Oklo’s reactors has its roots in the Experimental Breeder Reactor-II (EBR-II), a project managed by the Argonne National Laboratory, which successfully generated 20MWe of electricity over three decades. The EBR-II’s history showcased several advantages such as safe performance, efficient operation and maintenance, and the ability to function using both fresh and recycled fuel.

The potential for Oklo’s reactors to utilize over 94,000 metric tons of existing used nuclear fuel in the United States, an amount comparable to 1.2 trillion barrels of oil equivalent, was noted as a significant factor in the company’s favor. This capability could allow Oklo to tap into a vast resource for generating energy.

Oklo is currently developing three powerhouse designs with capacities to produce 15MW, 50MW, and 75MW of electricity. The company achieved a milestone in 2019 by securing a site use permit from the U.S. Department of Energy for its inaugural Aurora powerhouse at the Idaho National Laboratory. The project is slated to become operational between late 2027 and early 2028. Despite recent market volatility, the stock has shown impressive performance with a 65% return over the past year. For deeper insights into Oklo’s financial health and growth prospects, investors can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research reports, available for over 1,400 US stocks.

In other recent news, Oklo Inc. announced that Sam Altman has resigned from his position as Chairman of the Board. Altman, who has played a significant role in Oklo’s strategic direction, will be succeeded by CEO and Co-Founder Jacob DeWitte. The company is focused on developing small modular reactor (SMR) power plants and has secured six non-binding letters of intent for approximately 14 gigawatts of capacity, primarily from data center companies. BTIG analysts initiated coverage on Oklo with a Neutral rating, noting the company’s innovative approach but also highlighting the regulatory hurdles it faces before launching its first SMR power plant. Altman’s departure was not due to any disagreements with the company, and Oklo has expressed confidence in continuing its mission to provide scalable clean energy solutions. Despite the leadership change, Oklo is advancing its nuclear fuel recycling technologies in collaboration with the U.S. Department of Energy. Investors are closely monitoring these developments, given the potential shifts in company strategy or focus. Meanwhile, BTIG also initiated coverage on Nuscale Power with a Buy rating, reflecting optimism about the role of SMRs in the energy transition.

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