Core Viewpoint - NuScale Power's shares have significantly underperformed, losing 54.4% over the past three months, compared to a 50.6% decline in the Zacks Electronics-Power Generation industry [1][2] Company Performance - The stock has underperformed its industry competitors, with BWX Technologies gaining 2.2%, while GE Vernova and Oklo lost 3.8% and 36.4%, respectively [1] - NuScale Power's underperformance is attributed to execution risks related to its plans for establishing 6 gigawatts (GW) of nuclear capacity and competition from renewable energy sources [2][5] Expansion Plans - NuScale Power is advancing its plan to support up to 6 GW of new nuclear capacity through partnerships with ENTRA1 and the Tennessee Valley Authority (TVA), involving approximately 72 small modular reactor modules [5][6] - The first plant, utilizing 12 modules, is expected to begin delivering power around 2030 [5][8] Execution Risks - The company faces several execution risks, including the need for TVA and ENTRA1 to finalize site selection, complete engineering work, and convert the current term sheet into a binding power purchase agreement (PPA) [6][8] - Discussions are ongoing, but no firm contract has been signed yet, and delays in PPA negotiations could impact revenue timelines [8][9] Competitive Landscape - NuScale Power faces stiff competition in the nuclear energy sector from companies like Oklo, BWX Technologies, and GE Vernova, which are also advancing their own technologies and partnerships [10][11][12] - Recent partnerships in the industry aim to enhance project delivery and supply chain capabilities, further intensifying competition [10][11][12] Financial Outlook - For 2026, the Zacks Consensus Estimate projects a loss of 52 cents per share, which has widened from a previous estimate of 51 cents [13] - NuScale Power's current valuation is significantly higher than the industry average, with a forward price-to-sales (P/S) ratio of 51.69X compared to the industry's 31.27X [16][17] Conclusion - Despite having technology advantages and long-term project announcements, the company faces challenges related to project timelines and substantial upfront investments, raising concerns about growth prospects [18][19]

Core Insights - BWX Technologies (BWXT) stock is positioned well to leverage current momentum due to strong margins, a low-debt capital structure, and significant demand for nuclear solutions [3][4]. Financial Performance - The company has a record backlog of $7.4 billion, reflecting a 119% year-over-year increase, driven by multi-year projects in defense and specialized materials [3]. - Recent Q3 2025 earnings report showed a revenue increase of 29% to $866.3 million, with EPS guidance for 2025 revised upward to $3.75-$3.80 [3]. - Over the last twelve months, BWX Technologies experienced a revenue growth of 14.0% and an average growth of 11.6% over the past three years [7]. Profitability and Margins - The company maintains an operating cash flow margin of approximately 14.7% and an average operating margin of 12.5% over the past three years [7]. - BWXT is currently ranked in the top 10 percentile of stocks based on a proprietary metric of "trend strength," indicating strong momentum [7]. Market Position and Strategy - BWX Technologies supplies nuclear components, reactors, fuel, steam generators, materials processing, and environmental restoration services for the naval propulsion and nuclear power industries globally [5]. - The company is strategically positioning itself for long-term growth in clean energy and defense markets, highlighted by its Innovation Campus and a C$1 billion SMR contract [3]. Stock Valuation - Despite the current momentum, BWXT stock trades 7.9% below its 52-week peak, suggesting potential for further growth [7].

Core Insights - Fermi Inc. (NASDAQ:FRMI) has seen significant stock performance, attributed to its partnerships with South Korean companies for nuclear energy development [1][2]. Group 1: Partnerships and Contracts - Fermi Inc. has signed a deal with Doosan Enerbility to develop nuclear equipment, including reactor pressure vessels and steam generators, for Westinghouse Electric's AP1000 reactor projects [2]. - The company has also partnered with Hyundai Engineering & Construction for a major engineering contract related to the design of four AP1000 nuclear reactors under Project Matador, which aims to create a hypergrid energy campus with a capacity of 11 GW from various energy sources [3]. Group 2: Strategic Vision and Market Position - Fermi Inc.'s co-founder and CEO, Toby Neugebauer, emphasized the importance of collaborating with allies experienced in large-scale nuclear projects to enhance America's nuclear energy capabilities [4]. - Neugebauer noted that the commitment from Doosan Enerbility and Hyundai E&C positions Fermi America to effectively contribute to the development of clean nuclear power, aligning with the demands of the U.S. government [5].

Group 1 - HEI and TDG are competitors of BWX Technologies in the Aerospace & Defense sector, indicating that purchasing HEI and TDG stocks may be more advantageous than buying BWXT stock due to a divergence between valuation and performance [2][5] - BWX Technologies supplies nuclear components, reactors, fuel, steam generators, materials processing, and environmental restoration services for global naval propulsion and nuclear power industries [3] - The Trefis High Quality Portfolio aims to mitigate stock-specific risk while allowing for upside potential, outperforming the S&P with over 91% returns since its inception [4][6] Group 2 - A comparison of key metrics shows that HEI and TDG have lower valuations (P/OpInc) compared to BWX Technologies but exhibit higher growth rates in revenue and operating income [5][6] - Evaluating whether BWX Technologies stock is overpriced involves examining trends in revenue and operating income growth over the past year, with a persistent lag strengthening the assessment of overpricing [4][6]