Why Nano Nuclear Energy Stock Popped Today
Key Points
NANO Nuclear has signed an MOU with the UofI to continue developing a nuclear reactor on campus.
NANO has barely $200 million in cash, and its cash burn rate is accelerating.
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NANO Nuclear Energy (NASDAQ: NNE) stock, a start-up manufacturer of small modular (nuclear) power reactors, surged 12% through 1 p.m. ET Friday, the first trading day after the company announced -- on New Year's Eve -- that it has signed a Memorandum of Understanding (MOU) with the University of Illinois Urbana-Champaign "to collaborate on the development, construction, and operation of its KRONOS MMR" small modular reactor on campus.
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Is this news?
It's worth pointing out that NANO Nuclear characterizes this MOU as an extension of its existing relationship with UofI, which is already helping NANO with the "design and regulatory licensing of the prototype KRONOS MMR ... a high-temperature, gas-cooled microreactor that uses helium coolant and TRISO particle fuel."
To the extent this represents actual "new" news, though, the MOU merely "sets forth the next steps for the design, construction, ownership and ultimate operation" of the small modular nuclear microreactor.
In other words, this is good news for NANO Nuclear, but it's not really great news -- or even really "news" at all.
Is NANO Nuclear stock a buy?
It also doesn't materially move the needle for NANO Nuclear stock, financially speaking. Neither revenue nor profits are discussed in the company's press release, and analysts polled by S&P Global Market Intelligence continue to forecast it will be 2027 before NANO nuclear books any revenue at all, with profits not emerging before 2033 at the earliest.
That's still seven years away.
Meanwhile, NANO Nuclear stock has less than $204 million in the bank, is already burning $28 million a year -- and cash burn is expected to nearly double to $50 million this year alone. NANO Nuclear is running out of cash, Fools, and is being fueled mainly by momentum.
Should you buy stock in Nano Nuclear Energy right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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