Key Takeaways
- Shares touched an annual low of $8.85 following Director Corp Fluor’s disposal of 13.5M shares worth approximately $163M on April 9
- The transaction reduced Fluor’s ownership by 33.8%, with 26.4M shares remaining in its portfolio
- Several class-action lawsuits remain ongoing, connected to ENTRA1 disclosure matters with allegations of roughly 70% investor losses
- Q4 financial results disappointed significantly — EPS registered at ($0.80) compared to analyst projections of ($0.10), while revenue reached $1.81M versus expectations of $8.76M
- Shares surged 11.90% on April 14 as market participants capitalized on the decline, anticipating the May 7 earnings release
NuScale Power has experienced significant turbulence recently. Share prices descended to an annual low of $8.85 on April 14 before mounting a substantial recovery of 11.90% as opportunistic investors entered positions.
NuScale Power Corporation, SMR
The primary driver behind the decline came from a substantial insider transaction. Director Corp Fluor divested 13.5 million shares on April 9 at a mean price of $12.07, generating approximately $162.9 million in proceeds. This transaction decreased Fluor’s ownership stake by 33.8%, leaving the entity with roughly 26.4 million shares.
The magnitude and execution timing of this divestment created unease among market participants. When a director reduces their position by one-third in a single transaction, it naturally prompts investor scrutiny.
Shares closed at $9.59 on April 14, representing a significant decline from the 200-day moving average of $21.41. The price also remains considerably beneath the 50-day moving average of $12.56. For the year, SMR has declined 32.39%.
Ongoing Litigation Creates Additional Headwinds
Beyond the insider transaction, NuScale confronts multiple class-action legal proceedings. Various law firms — including Faruqi & Faruqi, Rosen Law, and Levi & Korsinsky — have initiated or announced investigations concerning the ENTRA1 disclosure. The deadline for lead-plaintiff applications is scheduled for April 20.
Legal complaints assert that ENTRA1 “veterans” lacked active nuclear projects and maintain that investors experienced approximately 70% losses. This legal uncertainty continues to weigh on market sentiment.
The company’s latest quarterly results compounded challenges. During Q4, NuScale posted EPS of ($0.80), falling short of the consensus forecast of ($0.10) by $0.70. Revenue registered at $1.81 million, substantially below analyst expectations of $8.76 million. The company operates with a negative net margin of 1,130.26%.
Wall Street Remains Divided
Analyst opinions on SMR’s trajectory show considerable divergence. The consensus rating stands at Hold, with an average price target of $20.96 — representing more than double the current trading level.
Barclays lowered its target from $45 to $15 while maintaining an Equal Weight rating. Goldman Sachs reduced its target from $20 to $14, preserving a Neutral stance. B. Riley maintains a Buy rating with a $24 target. Texas Capital issued a Strong Buy upgrade in January.
Regarding institutional activity, several prominent investors expanded positions during recent quarters. Vanguard grew its holdings by 40.5% in Q4. Morgan Stanley boosted its stake by 81%. Van ECK nearly doubled its position, increasing holdings by 117.8%.
Institutional ownership currently stands at 78.37% of outstanding shares.
The April 14 recovery appeared fueled by short-position covering combined with value-seeking buyers. Market participants are focusing attention on the May 7 earnings call, where investors anticipate updates regarding the company’s project pipeline and potential contract announcements.
Trading volume on April 14 exceeded 25 million shares, surpassing the average daily volume of 23.8 million.
