NuScale Power (SMR) Plunges 9.5% Amid Earnings Disappointment and Share Conversion Overhang

Summary
• NuScale Power (SMR) slumps 9.5% to $40.425, erasing $4.26 from its previous close
• Fluor’s conversion of 15M Class B shares to Class A triggers liquidity concerns
• Earnings miss revenue estimates by 32.6% amid $8.1M quarterly revenue
• Intraday range of $40.00–$44.695 highlights sharp volatility

NuScale Power’s stock has plunged nearly 10% in a single trading session, driven by a disappointing earnings report and a strategic share conversion by parent company Fluor. The stock’s collapse reflects investor anxiety over cash burn rates, regulatory delays, and the impending liquidity event. With the 52-week high of $53.50 now a distant memory, the market is recalibrating expectations for the nuclear energy innovator.

Earnings Miss and Share Conversion Spark Flight to Safety
NuScale’s 9.5% intraday drop stems from a dual blow: a revenue miss of 32.6% and Fluor’s impending share conversion. The company reported $8.1 million in quarterly revenue, far below the $11.7 million consensus, while its $0.13 loss per share underscored ongoing unprofitability. Fluor’s conversion of 15 million Class B shares to Class A stock—allowing a potential $675 million liquidity injection—has spooked investors, who fear oversupply and downward pressure on SMR’s valuation. Despite a reduced cash burn rate of $56.1 million in H1 2025, the lack of near-term reactor deployments and regulatory hurdles in Romania have amplified skepticism.

Specialty Industrial Machinery Sector Mixed as NuScale Drags
The Specialty Industrial Machinery sector, which includes peers like GE Vernova (GEV) and Eaton (ETN), has shown resilience, with GEV down just 0.2% despite SMR’s 9.5% plunge. However, NuScale’s struggles highlight sector-specific risks, particularly for firms reliant on long-lead infrastructure projects. While SMR’s P/B ratio of 7.6 remains elevated, its negative operating margin and insider selling activity contrast sharply with the sector’s average 12.3% return on equity. Investors are now scrutinizing cash flow dynamics across the industry, with SMR’s liquidity runway of ~5 years at current burn rates raising red flags.

Options and ETFs for Navigating SMR’s Volatility
• 200-day average: 25.47 (well below current price)
• RSI: 40.13 (oversold territory)
• MACD: 1.87 (bullish divergence with -0.898 histogram)
• Bollinger Bands: Lower band at $39.16 (near support)

Technical indicators suggest SMR is oversold but remains vulnerable to further declines. The 200-day average of $25.47 and RSI at 40.13 indicate a potential rebound, but the bearish K-line pattern and MACD histogram divergence warn of continued downward momentum. Traders should monitor the $39.16 lower Bollinger Band as a critical support level. The Tradr 2X Long SMR Daily ETF (SMU), down 20.5% today, offers leveraged exposure but carries high volatility risk.

Top Options Picks:
• SMR20250815C42.5 (Call, $42.50 strike, 8/15 expiry):
- IV: 84.60% (high volatility)
- Leverage: 33.67% (aggressive)
- Delta: 0.369 (moderate sensitivity)
- Theta: -0.1918 (rapid time decay)
- Turnover: 1.87M (liquid)
- Gamma: 0.0746 (responsive to price swings)
- Payoff at 5% downside: $0.00 (call expires worthless)
- Why: High leverage and liquidity make this call ideal for aggressive short-term bets, though rapid theta decay requires swift execution.

• SMR20250815P40.5 (Put, $40.50 strike, 8/15 expiry):
- IV: 103.94% (extreme volatility)
- Leverage: 16.10% (moderate)
- Delta: -0.473 (strong bearish bias)
- Theta: -0.0403 (slow decay)
- Turnover: 50.18K (liquid)
- Gamma: 0.0640 (moderate sensitivity)
- Payoff at 5% downside: $0.00 (put expires worthless)
- Why: This put offers a balanced approach with high IV and moderate delta, suitable for hedging or speculative shorting.

Action: Aggressive bulls may consider SMR20250815C42.5 for a rapid rebound trade, while cautious bears should target SMR20250815P40.5 for downside protection. Both require tight stop-losses given SMR’s liquidity risks.

Backtest NuScale Power Stock Performance
The strategy of buying the SMR ETF after a -10% intraday plunge has shown favorable performance. The backtest data indicates a 3-day win rate of 51.60%, a 10-day win rate of 52.35%, and a 30-day win rate of 53.58%. Additionally, the strategy yielded an average return of 1.64% over 3 days, 3.70% over 10 days, and 11.91% over 30 days, with a maximum return of 25.06% on day 59.

NuScale’s Freefall: When to Re-Enter the Trade
NuScale’s 9.5% drop reflects a perfect storm of earnings underperformance and liquidity fears, but the stock’s oversold RSI and bearish divergence suggest further declines are likely. Investors should watch for a breakdown below $39.16 (lower Bollinger Band) or a rebound above $44.70 (30-day resistance). Sector leader GE Vernova (GEV), down 0.2%, offers a safer alternative for industrial exposure. For SMR, a 5% downside scenario favors puts over calls, but the Tradr 2X ETF (SMU) remains a high-risk leveraged play. Watch for $39.16 support or regulatory updates in Romania to gauge the next move.