NuScale Power Trades Below $6 With the Only NRC-Certified Small Modular Reactor Design. Here's Why That Still Isn't Enough.
NuScale has a competitive edge that is made dull by its legal troubles and lack of secured business.
NuScale Power, the sole provider of small modular reactor (SMR) design certified by the U.S. Nuclear Regulatory Commission, is currently trading below $6 per share. Despite having its components already in commercial production, the company has not secured any binding commercial power purchase agreements for a full-scale plant. This lack of significant revenue is evident in NuScale's Q2 results, where the company reported a mere $75,000 in revenue compared to the estimated $9 million.
The company's net loss widened from $37.6 million to $50.1 million. However, NuScale boasts a substantial cash position, holding nearly $2 billion in cash and equivalents. Despite this financial cushion, the company faces several challenges, including a class action lawsuit alleging misleading statements about its partner, ENTRA1, and investigations into potential securities fraud by shareholder rights firms.
The NRC certification is a significant advantage, but the company's legal issues and absence of revenue streams could hinder its ability to secure a much-needed nuclear deal. Until these problems are resolved and a revenue stream is established, investors may be better off waiting on the sidelines.
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