Yahoo Finance NuScale Power (NYSE:SMR) shareholders have endured a 11% loss from investing in the stock a year ago
It's normal to be annoyed when stock you own has a declining share price. But in the short term the market is a voting machine, and the share price movements may not reflect the underlying business performance. Over the year the NuScale Power Corporation (NYSE:SMR) share price fell 11%. But that actually beats the market decline of 12%. Because NuScale Power hasn't been listed for many years, the market is still learning about how the business performs. It's down 14% in about a month. We do note, however, that the broader market is down 6.6% in that period, and this may have weighed on the share price.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for NuScale Power
Given that NuScale Power didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
NuScale Power grew its revenue by 514% over the last year. That's a strong result which is better than most other loss making companies. While the share price is down 11% in the last year, not too bad given the weak market. Given the strong revenue growth, it may simply be that the stock is suffering from market conditions. Given the strong growth in revenue, this could be an opportunity for long-term focussed growth investors, assuming the stock has the resources to reach profitability. Either way, we'd say the mismatch between the revenue growth and the share price justifies a closer look.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for NuScale Power in this interactive graph of future profit estimates.
A Different Perspective
Having lost 11% over the year, NuScale Power has generated a return within the same ballpark as the broader market. Given that the share price has continued to slide (by 7.3%) in the last three months, it's hard to know when we might see the bottom. Most people would be understandably disheartened by this sort of performance, given the lack of a long term history. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with NuScale Power .
But note: NuScale Power may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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