Where Will Oklo Stock Be in 5 Years? | The Motley Fool

Oklo ( OKLO +0.25%), a developer of microreactors for nuclear power plants, went public through a merger with a special purpose acquisition company ( SPAC ) in May. The combined company's stock opened at $15.50 per share, underwent significant fluctuations, but now trades at approximately $80. That's an impressive gain for an unprofitable company that hasn't yet generated any revenue. Will it deliver even bigger gains over the next five years? Let's review its business model, potential catalysts, and valuations to find out. Image source: Getty Images. Why did Oklo's stock soar? Oklo's public debut generated a lot of buzz because Sam Altman, OpenAI's CEO, served as its chairman before its public debut. Its Aurora microreactor could also make it much easier to deploy off-grid nuclear reactors in remote areas. The Aurora microreactor only generates 1.5 MWe of power, compared to a traditional nuclear reactor's 1,000 MWe (1 GWe) of power. However, multiple Aurora microreactors can be deployed together in a modular manner to generate power ranging from 15 MWe to 100 MWe. The Aurora also uses metallic uranium fuel pellets -- which are denser, more resistant to high temperatures, and potentially cheaper to fabricate than the uranium dioxide fuel pellets used in traditional nuclear reactors. The Aurora only needs to be refueled every 10 to 20 years, while traditional nuclear reactors must be refueled every one to two years. In theory, both types of pellets can be reprocessed and recycled within their own closed loops eventually. NYSE: OKLO Key Data Points What challenges does Oklo face? Oklo's technology appears to be a significant leap forward for nuclear power. It finally broke ground on its first Powerhouse reactor in Idaho, with a maximum power level of 75 MWe, in September. The U.S. Air Force (USAF) recently awarded it a contract to build a small reactor for Eielson Air Force Base in Alaska. It's also working with Siemens Energy ( SMNE.Y 0.53%) to engineer and deliver the steam turbine and generator systems, which will convert its reactor heat into electricity. That technology will help Oklo deploy its microreactors at scale. However, the Nuclear Regulatory Commission (NRC) has still not approved its combined license application (COLA) for deploying and operating those reactors. It expects to submit the full application by the end of 2025, and the formal review process is anticipated to take two to three years. That means that even if the approval process goes smoothly, Oklo is unlikely to deploy its first microreactors or generate any meaningful revenue until 2027 or 2028. For 2027, analysts expect the company to finally generate $16 million in revenue, despite incurring a net loss of $94 million. With a market cap of $13 billion, Oklo might seem absurdly valued at 813 times its 2027 sales. It's also constantly diluting its shares with its secondary offerings and stock-based compensation. However, it could still have plenty of room to grow as the nuclear energy market expands. According to MarketGenics, the global microreactor market is expected to...

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