NuScale Power (SMR) is in focus after recent coverage emphasized its status as the only small modular reactor developer with U.S. regulatory certification, as investors look ahead to its upcoming second quarter earnings call and progress on the Tennessee Valley Authority power purchase agreement.

Despite NuScale Power attracting fresh attention around its certified small modular reactor design and upcoming earnings call, the stock has experienced pressure, with the 30-day share price return down 30.04% and the 1-year total shareholder return down 72.80%. However, the 3-year total shareholder return remains positive at 46.33%, suggesting longer term holders have seen a very different experience from more recent buyers.

If NuScale's nuclear projects have caught your eye, it can be helpful to compare them with other power-related opportunities by scanning 89 nuclear energy infrastructure stocks

With NuScale Power shares down sharply over the past year yet still showing a positive 3 year total return, is the recent pullback signaling an opportunity, or is the market already accounting for future project wins and growth potential?

Most Popular Narrative: 90.2% Undervalued

NuScale Power last closed at $9.76, while the most followed narrative on the stock assigns a fair value of $100.00, using a discount rate of 9.69% to frame that gap.

The market looked at NuScale's 2023 project cancellation and saw a failed company. That is the wrong frame. What actually happened is that a first of kind technology encountered the first regulatory hurdle and cost discovery, which is not a verdict on the technology, it is the expected friction of building something that has never been built at commercial scale before. The structural case has not moved.

Curious what has to happen for NuScale Power to justify that kind of upside on paper? The narrative leans on rapid revenue expansion, improving margins and a rich future earnings multiple. The full story ties those assumptions to a business that is still loss making today, but priced as if a very different profit profile eventually arrives.

Result: Fair Value of $100 (UNDERVALUED)

However, NuScale Power still faces real pressure if project costs rise further or if utilities and data center customers delay commitments to SMR-based baseload capacity.

Another View on NuScale Power's Valuation

The popular community narrative sees NuScale Power as deeply undervalued at a fair value of $100, but the company’s own balance sheet tells a more cautious story. On a P/B basis, SMR trades at 2.9x versus a US Electrical industry average of 2.7x, and a far lower peer average of 38.9x.

This means NuScale Power appears slightly expensive compared with its broader industry, yet far cheaper than high-priced peers. Investors are left to judge whether that gap signals valuation risk if expectations cool, or potential upside if sentiment shifts toward the peer group.

Next Steps

If the mixed sentiment around NuScale Power has you on the fence, take a closer look at both sides of the story and make your own call by reviewing the 1 key reward and 3 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.