New York-based Nano Nuclear Energy (NNE) is an early-stage advanced technology-based nuclear energy company producing cheap, small, and safe portable energy solutions. The company produces ZEUS, its solid-core battery reactor, and ODIN, its low-pressure coolant reactor, alongside developing a high-assay, low-enriched uranium (HALEU) fabrication facility in order to produce fuel for the nuclear reactor industry, fuel transportation, and nuclear consultation businesses.
About NNE Stock
A member of the small-cap benchmark Russell 2000 Index (RUT), NNE is valued at $849 million by market cap.
Nano Nuclear Energy stock has been a standout performer this year amid surging interest in nuclear energy stocks, particularly as "Magnificent Seven" hyperscalers increasingly turn to nuclear energy to fuel their artificial intelligence (AI) data center ambitions.
After launching its initial public offering (IPO) as recently as May 2024, at a price of just $4.00, NNE has soared. While the shares are up 558% since then, NNE is currently pulling back from a test of resistance in the $30 area, which previously marked its July highs. The stock's 50-day moving average has cushioned the pullback so far, indicating a potential entry point.
Nano Nuclear Energy is Pre-Revenue
Nano Nuclear Energy filed its quarterly results with the SEC on Aug. 13, and the documents highlight very clearly what investors are risking when buying shares of this startup nuclear energy stock.
NNE posted a net loss of $4.7 million for the quarter ended June 30, or $0.17 per share, much wider than its loss of $2.70 million, or $0.12 per share, in the year-ago period. The company noted that it has not generated any revenue from its inception through the end of the reporting period.
Nano Nuclear ended the quarter with a cash balance of $13.79 million, nearly double last year’s $6.95 million. However, with no revenue coming in, the cash burn rate is expected to be substantial.
“We believe that our existing cash will fund our current operating and R&D plans through at least the next twelve months from the date of this Quarterly Report,” according to the filing. “However, the future development of our business towards ultimate commercialization of our products will require significant amounts of cash resources... If we raise additional funds through further issuances of equity or equity-linked instruments, our existing stockholders could suffer significant dilution.”
Despite this clear warning, many investors still seemed dismayed by NNE's most recent capital raises. Investors taking a chance on this pre-revenue stock should be aware that the company does not expect to generate “meaningful” revenue for several more years, which means additional offerings are all but guaranteed going forward.
NNE Wins a New DoE Deal
Nano Nuclear Energy and privately held LIS Technology (LIST) were recently awarded a contract with the Department of Energy (DOE) for its low-enriched uranium (LEU) enrichment acquisition program. As the prime contractor, LIST will use its laser technology to help develop the primary uranium enrichment process, while key subcontractor NNE is set to work on fuel deconversion, fabrication, and transportation.
NNE and LIST are related parties, and announced their collaboration in early November.
Under the terms of the $3.4 billion program, the DOE will issue task orders to the six awardees, including Nano Nuclear and LIST, allowing them to bid on tasks with a minimum order value of $2 million.
“Our role in this program is to help build a sustainable and lasting U.S. fuel supply chain that re-establishes the U.S. fuel manufacturing capabilities so it can power its industrial, technological, and energy sovereignty ambitions," said James Walker, CEO and Head of Reactor Development at Nano Nuclear. "It’s a significant step forward for both our company and the nuclear energy sector as a whole.”
What Does Wall Street Say About NNE Stock?
The nuclear energy startup is very lightly covered on Wall Street, with only 2 analysts providing coverage. However, both are very bullish on NNE stock, with two out of two “Strong Buy” ratings.
The mean price target of $58.00 suggests expected upside potential of 127.5% from current prices.
For investors who have a sufficiently high risk tolerance to ride out repeated capital-raising efforts as Nano Nuclear Energy slowly works its way toward revenue generation, their patience may ultimately pay off. In the meantime, more conservative investors in search of nuclear energy exposure may prefer to opt for relatively tame utility stocks.
