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NuScale Power: A Speculative Investment with Ups and Downs

NuScale Power has seen significant stock surge, noting a 330% increase over the past 12 months. However, challenges remain with widening net loss and uncertain contracts, prompting a cautious investment stance.

Date: 
AI Rating:   5

NuScale Power's Financial Performance highlights both promise and concern for investors. The stock has experienced considerable growth, but there are significant challenges ahead.

NuScale has reported a revenue surge of 62% to $37 million in 2024, largely thanks to its progress on projects in Romania. However, net loss has widened from $180 million to $348 million, indicating that the company continues to face considerable costs that overshadow revenue gains. Furthermore, analysts forecast that revenue will more than double in 2025 to $74 million while net loss is expected to narrow to $84 million. By 2026, revenue is projected to increase significantly to $219 million with a further reduction in net loss to $76 million.

Despite the positive revenue trajectory, the increase in net loss poses a risk and may concern potential investors about profitability timelines. The lack of U.S. contracts and ongoing reliance on international projects could also impact future earnings.

Investors should be cautious, given that while the enterprise value appears reasonable at 10 times next year's sales, the company has seen a drastic increase in outstanding shares (83% over the past two years) due to secondary offerings and stock-based compensation. Insider selling has also been significantly higher than purchasing, which indicates potential sentiment issues with current stock holders.

Based on this report, NuScale Power presents a complex case for investors. The positive trends in revenue and strategic partnerships are overshadowed by increasing losses and insider sentiment trends. Investment at this stage should be approached with caution, keeping in mind the speculative nature of the stock given the market's current volatility.

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