NuScale's 2025 Underperformance Reinforces DeepValue's Sell Thesis on Dilution and Timeline Risks

What happened

NuScale Power's stock struggled in 2025, underperforming peers like Oklo which reached an all-time high, as highlighted in a recent Motley Fool article. This weakness stemmed from Fluor's planned exit as a large investor, ongoing share dilution from ATM issuances, and delays in key project timelines such as RoPower's final investment decision. DeepValue's master report corroborates these issues, noting NuScale remains pre-commercial with no firm NuScale Power Module orders, negative free cash flow of approximately -$443M TTM, and heavy reliance on equity funding. Market sentiment has deteriorated to a consensus 'Reduce' rating, with analysts emphasizing risks from capital overhangs and slow commercialization despite the nuclear/AI narrative. Consequently, immediate pressures from equity markets and funding needs overshadow NuScale's long-term potential, reinforcing DeepValue's 'POTENTIAL SELL' recommendation.

Implication

Fluor's divestment and potential ATM resumption after February 2026 could further dilute shareholders and suppress the stock price, adding to the overhang. With RoPower's FID not expected until 2026-27 and no firm contracts, cash burn may force unfavorable equity raises before revenue materializes, threatening per-share value. Competitors like Oklo securing deals underscore NuScale's lag in converting regulatory advantage into commercial wins, raising execution concerns. DeepValue's bear case, with a 40% probability and $12 implied value, highlights substantial downside if funding or project risks escalate, while the base case offers limited upside. Therefore, maintaining or adding exposure is risky; better opportunities may exist after clearer progress on milestones like FID or at lower entry points around $10.

Thesis delta

The new article reinforces DeepValue's existing thesis by highlighting the same dilution and timeline concerns that underpin the 'POTENTIAL SELL' rating. No fundamental shift is indicated, but it confirms market perception is aligning with these execution risks, tightening the window for investors to exit before further headwinds materialize. Thus, the thesis remains unchanged, emphasizing caution until visible commercial progress or improved funding conditions emerge.