Why did SMR's Q4 2024 earnings shock analysts?

NuScale Power's (SMR) Q4 2024 earnings report revealed a significant net loss of $180.32 million and a revenue of $34.22 million, which includes a substantial non-cash expense of $170 million. Despite these alarming figures, the company's stock remained relatively stable, reflecting a cautious market outlook and diverse analyst opinions.

1. **Revenue Surge**: NuScale Power's revenue for Q4 2024 surged to $34.2 million, surpassing the forecasted $5.63 million by approximately 507%. This unexpected increase was due to the company's successful expansion of its production capabilities and the advancement of its Small Modular Reactor (SMR) technology.
2. **Stock Market Reaction**: Despite the revenue boost, NuScale Power's stock experienced a 10.12% decline during regular trading hours, closing at $15.6 in aftermarket trading. This drop suggests that the market may have had concerns about the company's long-term profitability, operational efficiency, or strategic direction.
3. **Non-Cash Expense**: The net loss was significantly influenced by a $170 million non-cash expense, which could be related to accounting practices, such as stock-based compensation or depreciation adjustments. Non-cash expenses do not directly impact cash flows, but they can affect net income and profitability calculations.
4. **Market Sentiment and Analyst Ratings**: Analysts have given NuScale Power a consensus rating of "Moderate Buy" with a target price of $9.68, indicating a cautious optimism. The company's CTO, Jose N. Reyes Jr., recently sold a substantial amount of stock, which could be interpreted as a lack of confidence in the company's short-term prospects.

In conclusion, while NuScale Power's Q4 2024 earnings showed a remarkable revenue surge, the company's stock did not initially reflect this positive development. The market's reaction and analyst ratings suggest that investors are concerned about NuScale Power's long-term financial health, operational challenges, and strategic uncertainties.