Prediction: Buying NuScale Power Today Could Set You Up for Life

NuScale Power (NYSE: SMR) has perhaps never before looked like such a strong buy.

Indeed, the advanced nuclear company -- the only one with a small modular reactor (SMR) design certified by the Nuclear Regulatory Commission -- has shaved about 85% of its value since last July.

That alone doesn't make it a buy, but when you look at the company's progress, the sell-off could be teeing up NuScale for a strong rebound. Here's what I mean.

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The bull case for NuScale requires patience

NuScale Power is trying to become the first publicly traded U.S. SMR company to turn its first-mover advantage into actual commercial sales. That advantage is its NRC-approved SMR design, which has given it a years-long head start in a tough regulatory environment.

True, NuScale hasn't deployed an SMR yet. But the NRC approval has moved it closer to doing so. It is currently working through its commercial partner, ENTRA1, toward what could be the biggest SMR deployment program in U.S. history: a power plant of up to 6 gigawatts (GW) across TVA's seven-state service territory. If these talks turn into a binding agreement, NuScale could end up deploying around 72 Power Modules for this project.

Then there's the Romanian project in Doiceşti. This planned 462 megawatt-electric (MWe) plant is aiming to use six of NuScale's Power Modules, and its first module could be in commercial operation in 2033.

That last date, 2033, brings me to my main point: NuScale is not a stock for the short term. If you look at the company with your eyes on the near future, say, the next five years, you're probably not looking far enough. NuScale is probably not going to deliver life-changing gains over the next half-decade. But if you enlarge your time horizon to 10, maybe 15 years, then you're thinking on the same time scale as the nuclear energy industry operates.

In that longer-time perspective, NuScale, in my opinion, is a stock worth buying now. That's not to say it's dirt cheap: Even after its recent slide, it carries a $3 billion market cap, with about $18.7 million in trailing-12-month revenue. At today's price, it trades at about 160 times trailing sales.

Still, if Wall Street continues to approach advanced nuclear energy bearishly, then that gives you the chance to build a position gradually at a lower price. NuScale still has a lot to prove, true, but for investors who can wait a decade or longer for the opportunities to play out, an investment today could help set you up for life.

Steven Porrello has no position in any of the stocks mentioned. The Motley Fool recommends NuScale Power. The Motley Fool has a disclosure policy.