NuScale Power (SMR) is back in focus after reporting successful fabrication of first of a kind boron oxide pellets for its passive emergency core cooling system. Investors are weighing what this technical step means for commercialization progress.

Despite this progress, NuScale Power's recent share price has been weak, with the stock at about $9.70 and a year to date share price return down 40.53%, while the 1 year total shareholder return declined 71.91%, but the 3 year total shareholder return remains positive at 63.85%.

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Bulls point to NuScale Power's unique NRC approval and recent technical progress, while bears focus on heavy losses and a sharp share price slide. Which side does the current valuation lean toward as the next step in the story?

NuScale Power's most followed narrative puts fair value at $100 per share versus the recent $9.70 close. This frames the current sell off as a valuation disconnect rather than a verdict on the business.

The market looked at NuScale's 2023 project cancellation and saw a failed company. That's 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's the expected friction of building something that has never been built at commercial scale before.

Want to see why this narrative supports a triple digit fair value for NuScale Power? The story leans on rapid revenue expansion, rising margins and a future earnings multiple usually reserved for established growth leaders. It is worth examining which specific assumptions do the heavy lifting in that $100 figure and how they tie back to nuclear deployment expectations.

According to Delphic, the fair value hinges on NuScale Power converting its certified small modular reactor design into substantial revenue growth, while eventually reaching profit margins and a future P/E level that justify a much higher share price than today. The narrative also applies a discount rate of 9.69%, which is relatively modest and keeps the implied fair value elevated compared with more conservative hurdle rates. Result: Fair Value of $100 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, NuScale Power's narrative could be challenged if project costs escalate further or if new delays slow the path from reactor design to meaningful commercial revenue.

Find out about the key risks to this NuScale Power narrative.

Given the mix of optimism and concern around NuScale Power right now, it makes sense to review the data yourself and form a clear view quickly. To weigh up both sides in one place, start with 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.

Companies discussed in this article include SMR.

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