Should You Buy, Sell or Hold NuScale Power Stock at Its P/S of 163.9X?

NuScale Power SMR shares are currently overvalued, as suggested by its Value Score of F.In terms of the forward 12-month price/sales (P/S), SMR is trading at 163.9X, significantly higher than its median of 14.24X and the Zacks Computer and Technology sector’s 6.57X.Price/Sales (F12M)Image Source: Zacks Investment ResearchMeanwhile, NuScale Power shares have surged 837.1% in the trailing 12-month period, outperforming the Zacks Computer & Technology sector’s gain of 22.2% and the Zacks Electronics- Power Generation industry’s rise of 422.9%.One Year PerformanceImage Source: Zacks Investment ResearchThe strong performance can be attributed to the high demand for electricity and clean energy, along with the increasing need for AI-powered data centers, which serve as a major driving factor.With an impressive share price performance but at such a high valuation, how should investors approach SMR stock? Let’s investigate.NuScale Powers Growth With Clean Energy for Data CentersNuScale is gaining strong momentum across various sectors, especially as energy demands continue to rise. The increasing energy demand, driven by sectors like data centers, which require continuous, reliable, and carbon-free energy, has been a major growth driver.In response to this growing demand, data center power consumption in the United States is projected to rise from 25 gigawatts in 2024 to over 80 gigawatts by 2030. This growth trend presents a significant opportunity for NuScale, as its Small Modular Reactor (SMR) technology offers consistent, carbon-free energy that can meet the increasing demands of hyperscale data centers.In December 2024, NuScale opened its Energy Exploration Center at The Ohio State University. The center aims to develop the next-generation of nuclear professionals through hands-on learning and SMR simulations, reinforcing the need for skilled workers in the nuclear energy sector.NuScale’s 77-megawatt Light Water Reactor design, expected to receive Standard Design Approval by mid-2025, positions the company as a key player in meeting growing domestic and global energy needs through scalable, clean energy solutions.The company is also gaining traction in international markets, particularly in East and Southeast Asia, Eastern Europe, and the Middle East. The U.S. Department of State’s partnership with the Government of Ghana, where NuScale technology is chosen for an SMR plant, is a significant step forward in expanding NuScale’s global footprint.SMR Benefits From Tech Giants’ Commitment to Nuclear EnergyNuScale continues to attract strong interest from major technology companies and infrastructure capital. Companies like Amazon AMZN, Microsoft MSFT, Alphabet GOOGL and Oracle have made substantial commitments to using nuclear energy, including SMRs, to meet its sustainability goals, which positively impacts NuScale’s market positioning.Amazon’s acquisition of Talen Energy’s data center campus connected to a nuclear station and Microsoft’s commitment to nuclear energy have further validated the demand for SMRs in powering data centers and heavy industries.Companies like Google and Oracle are also showing interest in using SMRs for large-scale data centers, reinforcing the growing trend toward nuclear solutions for energy-intensive tech operations. As these organizations align their energy strategies with sustainable nuclear options, the demand for SMRs continues to gain momentum, positioning NuScale at the forefront of this emerging energy market.SMR Earnings Estimate Shows Downward TrendFor 2025, the Zacks Consensus Estimate for loss is pegged at 45 cents per share, which has widened by 10 cents over the past 30 days. SMR reported earnings of 73 cents per share in the year-ago quarter.NuScale Power Corporation Price and Consensus NuScale Power Corporation price-consensus-chart | NuScale Power Corporation QuoteFind the latest EPS estimates and surprises on Zacks Earnings Calendar.What Should Investors Do With SMR Stock?NuScale’s advancements in SMR technology and its growing partnerships with tech giants and financial institutions position it as a key player in the future of sustainable, carbon-free energy.However, despite these innovations and collaborations, the company faces challenges in the highly competitive energy market, which includes the growing presence of renewable energy sources and regulatory hurdles. These factors could affect NuScale’s market positioning, even with its technological edge.The delayed commercialization of its small modular reactor technology, high operating expenses despite reductions, and the reliance on long-term, large-scale projects have further hindered its financial stability. SMR’s stretched valuation is also a concern.NuScale currently carries a Zacks Rank #4 (Sell), which implies that investors should stay away from investing in this stock at present.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. 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