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How Should an Investor Play OKLO Stock Pre-Q1 Earnings Release?

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Oklo, Inc. (OKLO - Free Report) is slated to report first-quarter 2025 results on May 13, after market close.
 
The Zacks Consensus Estimate for the first-quarter bottom line is pegged at a loss of 11 cents per share, suggesting a strong improvement from a loss of $4.79 reported in the prior-year quarter. The bottom-line estimate, however, has deteriorated from nine cents in the past 60 days. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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Image Source: Zacks Investment Research

OKLO’s earnings missed the Zacks Consensus Estimate in the last reported quarter.

Zacks Investment Research
Image Source: Zacks Investment Research

Earnings Whisper for OKLO Stock

Our proven model does not conclusively predict an earnings beat for OKLO this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

OKLO has an Earnings ESP of -4.76% and a Zacks Rank #4 (Sell) at present.

You can see the complete list of today’s Zacks #1 Rank stocks here.

OKLO’s Q1 Results: Key Factors to Consider

During the January-March 2025 quarter, Oklo signed some landmark agreements, made a strategic acquisition and achieved some milestones, which are likely to get reflected in its upcoming results.

In March, the company acquired Atomic Alchemy, an industry forerunner in radioisotope production. These radioisotopes are used in healthcare, research and defense. Atomic Alchemy’s special VIPR Reactor technology will help Oklo build a strong supply chain in the United States. This deal also supports OKLO’s work in fuel recycling and nuclear energy businesses.

In the same month, the company entered into an Interface Agreement with Idaho National Laboratory (INL), to ensure its strict adherence to environmental regulations throughout the site investigation process, and also finalized a Memorandum of Agreement with the U.S. Department of Energy (DOE), as part of its progress toward deploying its first commercial powerhouse in Idaho.

In February, Oklo revealed that it has joined the DOE’s Voucher Program to evaluate and test advanced structural materials for its Aurora powerhouse. This participation is likely to have strengthened OKLO’s path to commercial deployment for its Aurora powerhouse.

In the same month, the company signed a Memorandum of Understanding with Lightbridge Corporation to explore co-locating a Lightbridge Commercial-scale Fuel Fabrication Facility at Oklo’s proposed site. This collaboration is expected to have enhanced OKLO’s fuel recycling capabilities, streamlined supply-chain efficiencies and supported its mission to deliver cost-effective, carbon-free energy.

In January, Oklo partnered with RPower to deliver a phased power model for data centers, replacing diesel with natural gas by using RPower natural gas generators and ultimately transitioning to a supply of clean, scalable energy from its Aurora powerhouses.

With the nuclear fuel sector receiving significant funding in recent times, the aforementioned achievements are likely to have benefited Oklo. Further updates are expected along with the first-quarter results.

The company is yet to generate revenues, so its regular operating expenses, associated with developing its next-generation Aurora powerhouses, will continue to put downward pressure on its bottom line, thereby resulting in quarterly losses.

Price Performance & Valuation

Shares of Oklo have surged 48.8% over the past year, outperforming the Zacks Alternative-Energy industry’s return of 32.2% as well as the broader Zacks Oils-Energy sector’s decline of 13.5%. It has also outpaced the S&P 500’s surge of 7.9% in the same period.

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Image Source: Zacks Investment Research

A similar stellar performance has been delivered by other industry players, such as Bloom Energy (BE - Free Report) and Nano Nuclear Energy (NNE - Free Report) , whose shares have surged 40.8% and 365.8%, respectively, over the past year.

As one can see below, OKLO’s trailing 12-month Price/Book (P/B) ratio is more than that of its industry and thus trading at a premium. This suggests that investors anticipate the company will generate more profits from its assets compared with its industry.

OKLO’s Price/Book TTM

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Image Source: Zacks Investment Research

On the contrary, its industry peers are trading at a discount. While Bloom Energy is trading at a trailing 12-month P/B of 6.33X, NNE is trading at 6.7X.

Investment Thesis

The rapid expansion of data centers worldwide, coupled with rising electricity consumption, particularly in emerging economies driven by economic growth, has been fueling global electricity demand. To this end, it is imperative to mention that the United States remains the largest producer of nuclear power, contributing nearly 30% to global nuclear electricity generation, according to the World Nuclear Association.

Against this backdrop, Oklo is pioneering next-generation fast-fission power plants, known as “powerhouses.” Its Aurora powerhouse line is designed to generate 15-50 megawatt electric (MWe) from recycled and fresh nuclear fuel, with the potential to scale up to 100 MWe. This positions Oklo for long-term growth in the nuclear power sector.

However, the company is yet to generate revenues, with its first Aurora powerhouse expected to be deployed in 2027. This suggests limited top-line performance in the near term.

Should You Buy OKLO Stock Before Q1 Earnings Release?

Despite OKLO’s solid performance at the bourses, the company is likely to disappoint its investors with its first-quarter results, taking into account its negative earnings ESP and the downward revision observed in its earnings estimate. Reviewing this, along with the stock’s unfavorable Zacks Rank and premium valuation, investors interested in OKLO may consider letting it go before next Tuesday.


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