I'm Calling It: NuScale Power Is a Buy Before November

NuScale Power (NYSE: SMR) just reported earnings in early May. No shocking disclosures were revealed, but the nuclear stock did drop some nuggets worth paying attention to.

The two biggest updates dealt with the two biggest projects in NuScale's pipeline: a 6 gigawatt nuclear system in the U.S., and a 462 megawatt system in Romania. Neither of these projects have entered the construction phase. In fact, both are still waiting for clear financing updates that will clear up how exactly these projects will be paid for.

Until those financing decisions are finalized, the market will price NuScale stock at a discount given the extreme remaining uncertainty that these small modular reactor (SMR) systems will ever see the light of day. Here's the thing: We could gain a lot of clarity regarding these concerns by November of this year.

Here's why NuScale Power stock is a buy before November

NuScale Power is set to release its next earnings sometime in August. The following earnings announcement should occur sometime in November. That makes the November announcement management's last major opportunity to reveal any sizable updates to its project pipeline.

There is a chance that we will receive a positive update on the company's project with RoPower, which in February was approved for investment by the shareholders of Romanian nuclear operator Nuclearelectrica.

"The Final Investment Decision for the SMR project in Doicești marks the transition from the analysis phase to the implementation phase, consolidating Romania's position at the forefront of the new European nuclear industry," commented Romania's Minister of Energy. "We are replacing 600 MW from a former thermal power plant with 462 MW of clean, stable, and predictable energy."

I wouldn't count on any major update for this project this year. However, given that the next planning stage is expected to last around 15 months, that puts a future announcement sometime in mid-2027.

Image source: Getty Images.

This year, I have my eyes more set on NuScale's project with the Tennessee Valley Authority (TVA) in the eastern U.S. This is a much bigger deal, anyway, in terms of sheer size.

During the latest conference call, NuScale's CFO noted encouragingly, "We're hopeful that TVA can come across the line at some point later this year." That's because a binding power purchasing agreement (PPA) -- an agreement that commits TVA to buy power from the project at a certain rate, often for decades to come -- is expected to be closed this year, clearing way for construction to begin.

Management lamented "a quieter quarter from an announcement perspective" on the latest earnings call. I expect management to do everything possible to close a PPA deal with TVA and ready a sizable announcement for the November earnings call.

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