We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Oklo Stock Surges 90% Year to Date: Is This the Right Time to Buy?
Read MoreHide Full Article
Oklo Inc.’s (OKLO - Free Report) shares have surged an impressive 90.1% in the year-to-date period, outperforming the Zacks Alternative-Energy industry’s return of 60.8% as well as the broader Zacks Oils-Energy sector’s growth of 6.8%. It also outpaced the S&P 500’s surge of 27.7% in the same period.
With rapidly increasing demand for clean energy sources as the preferred choice to generate electricity, Oklo rides on its recently signed partnerships and other initiatives that reflect its strong commitment toward offering reliable, commercial-scale clean energy to its customers.
A similar stellar performance has been delivered by other industry players, such as GEV Vernova (GEV - Free Report) , Constellation Energy Corporation (CEG - Free Report) and Bloom Energy (BE - Free Report) , whose shares have surged 148.6%, 119.1% and 75.4%, respectively, year to date.
Image Source: Zacks Investment Research
With Oklo riding high, individuals may rush to add the stock to their portfolio. However, before making any hasty decision, it would be prudent to take a look at the reasons behind the surge, the stock’s growth prospects as well as risks (if any) to investing in the same. The idea is to help investors make a more insightful decision.
What Led to OKLO Stock’s Price Surge?
Increasing data center growth across the globe, along with rising electricity consumption, particularly in emerging nations and developing economies, backed by strengthening economic activities and prosperity in these countries, has been boosting global electricity demand. To this end, it is imperative to mention that Oklo is developing next-generation fast-fission power plants called “powerhouses.” In particular, its Aurora powerhouse product line is designed to produce 15-50 megawatts electric (MWe) from recycled nuclear fuel and fresh fuel, with the potential to increase the figure to 100 MWe.
The company has achieved several significant deployment and regulatory milestones in recent times for deploying its Aurora powerhouses, which must have boosted investors’ confidence in this stock. This, in turn, got reflected in OKLO’s share price hike.
Evidently, in September 2024, the company signed a Memorandum of Agreement (“MOA”) with the DOE Idaho Operations Office, which offered the former access to conduct investigations at its preferred site in Idaho to construct power plants. Oklo has also signed additional non-binding letters of intent with Equinix, Diamondback Energy and Prometheus Hyperscale (formerly Wyoming Hyperscale) and received two other letters of intent to provide an additional 750 MWe for data center customers. This is expected to bring OKLO’s current total deployment of Aurora powerhouses to more than 2,100 MWe in capacity, which reflects nearly a 200% increase since July 2023.
Will OKLO Stock Continue to Grow?
Oklo's strategic partnership agreements with multiple companies, like one with Equinix earlier this year for 500 MW of power, reflect the attention and potential demand surrounding its Aurora powerhouse product line in the electricity market.
The United States is the world's largest producer of nuclear power, accounting for about 30% of the worldwide generation of nuclear electricity (as per the latest report by the World Nuclear Association). Thus, Oklo's long-term growth prospects remain significant.
However, the company has not yet started generating revenues. With its first Aurora powerhouse targeted for deployment in 2027, we may not expect it to deliver any solid top-line performance in the near term. Meanwhile, it is continuing to incur significant operating expenses to successfully develop its powerhouses, which in turn has been putting downward pressure on its bottom line. So, the performance of the company in terms of generating formidable revenue and profit remains slick in the near term, which might be a cause of concern for its investors.
The downward revision observed in its near-term earnings estimate mirrors a similar picture. Such downward revisions are indicative of analysts’ dwindling confidence in the stock of late.
Image Source: Zacks Investment Research
OKLO’s Poor ROE Poses Another Risk
A quick sneak peek at the company’s return on equity (ROE) over the past year compared to that of its peer group shows a dismal scenario. OKLO’s ROE is lower than that of its peer group. A negative ROE indicates that a company is making a loss, as is evident from its recent quarterly results.
Image Source: Zacks Investment Research
Final Thoughts
To conclude, investors interested in OKLO stock should wait for a better entry point, considering the downward revision in its earnings estimate and a negative ROE.
However, those who already have this Zacks Rank #3 (Hold) stock in their portfolio may continue to do so, considering its long-term growth prospect and impressive share price performance so far this year.
Image: Bigstock
Oklo Stock Surges 90% Year to Date: Is This the Right Time to Buy?
Oklo Inc.’s (OKLO - Free Report) shares have surged an impressive 90.1% in the year-to-date period, outperforming the Zacks Alternative-Energy industry’s return of 60.8% as well as the broader Zacks Oils-Energy sector’s growth of 6.8%. It also outpaced the S&P 500’s surge of 27.7% in the same period.
With rapidly increasing demand for clean energy sources as the preferred choice to generate electricity, Oklo rides on its recently signed partnerships and other initiatives that reflect its strong commitment toward offering reliable, commercial-scale clean energy to its customers.
A similar stellar performance has been delivered by other industry players, such as GEV Vernova (GEV - Free Report) , Constellation Energy Corporation (CEG - Free Report) and Bloom Energy (BE - Free Report) , whose shares have surged 148.6%, 119.1% and 75.4%, respectively, year to date.
With Oklo riding high, individuals may rush to add the stock to their portfolio. However, before making any hasty decision, it would be prudent to take a look at the reasons behind the surge, the stock’s growth prospects as well as risks (if any) to investing in the same. The idea is to help investors make a more insightful decision.
What Led to OKLO Stock’s Price Surge?
Increasing data center growth across the globe, along with rising electricity consumption, particularly in emerging nations and developing economies, backed by strengthening economic activities and prosperity in these countries, has been boosting global electricity demand. To this end, it is imperative to mention that Oklo is developing next-generation fast-fission power plants called “powerhouses.” In particular, its Aurora powerhouse product line is designed to produce 15-50 megawatts electric (MWe) from recycled nuclear fuel and fresh fuel, with the potential to increase the figure to 100 MWe.
The company has achieved several significant deployment and regulatory milestones in recent times for deploying its Aurora powerhouses, which must have boosted investors’ confidence in this stock. This, in turn, got reflected in OKLO’s share price hike.
Evidently, in September 2024, the company signed a Memorandum of Agreement (“MOA”) with the DOE Idaho Operations Office, which offered the former access to conduct investigations at its preferred site in Idaho to construct power plants. Oklo has also signed additional non-binding letters of intent with Equinix, Diamondback Energy and Prometheus Hyperscale (formerly Wyoming Hyperscale) and received two other letters of intent to provide an additional 750 MWe for data center customers. This is expected to bring OKLO’s current total deployment of Aurora powerhouses to more than 2,100 MWe in capacity, which reflects nearly a 200% increase since July 2023.
Will OKLO Stock Continue to Grow?
Oklo's strategic partnership agreements with multiple companies, like one with Equinix earlier this year for 500 MW of power, reflect the attention and potential demand surrounding its Aurora powerhouse product line in the electricity market.
The United States is the world's largest producer of nuclear power, accounting for about 30% of the worldwide generation of nuclear electricity (as per the latest report by the World Nuclear Association). Thus, Oklo's long-term growth prospects remain significant.
However, the company has not yet started generating revenues. With its first Aurora powerhouse targeted for deployment in 2027, we may not expect it to deliver any solid top-line performance in the near term. Meanwhile, it is continuing to incur significant operating expenses to successfully develop its powerhouses, which in turn has been putting downward pressure on its bottom line. So, the performance of the company in terms of generating formidable revenue and profit remains slick in the near term, which might be a cause of concern for its investors.
The downward revision observed in its near-term earnings estimate mirrors a similar picture. Such downward revisions are indicative of analysts’ dwindling confidence in the stock of late.
OKLO’s Poor ROE Poses Another Risk
A quick sneak peek at the company’s return on equity (ROE) over the past year compared to that of its peer group shows a dismal scenario. OKLO’s ROE is lower than that of its peer group. A negative ROE indicates that a company is making a loss, as is evident from its recent quarterly results.
Final Thoughts
To conclude, investors interested in OKLO stock should wait for a better entry point, considering the downward revision in its earnings estimate and a negative ROE.
However, those who already have this Zacks Rank #3 (Hold) stock in their portfolio may continue to do so, considering its long-term growth prospect and impressive share price performance so far this year.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.