Could This $14 Energy Stock Be Your Ticket to Millionaire Status?
Key Points
X-Energy is developing smaller, more scalable, and safer nuclear reactors.
But it still faces many challenges, and its stock isn’t cheap.
X-Energy (NASDAQ: XE) hasn't minted any millionaires since its IPO on April 24. The developer of small modular reactors (SMRs) went public at $23 per share, but it now trades at $14. Let's see why X-Energy's stock fizzled out, and if it might eventually deliver millionaire-making gains.
Why did X-Energy's stock drop below its IPO price?
X-Energy's Xe-100 SMRs, which individually generate 80 MWe, are much smaller than conventional nuclear reactors that typically generate more than 1,000 MWe. However, the Xe-100 can be deployed more easily in remote and off-grid areas.
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Unlike conventional reactors, which use standard uranium rods and are water-cooled, the Xe-100 uses helium-cooled TRISO (tri-structural isotropic) fuel pebbles. That difference enables the Xe-100 to resist much higher temperatures than conventional reactors, which significantly reduces the chance of a nuclear meltdown.
X-Energy's technology sounds promising, but it doesn't plan to deploy its first commercial reactors until the early 2030s. Until then, it will generate most of its revenue from engineering services, government grants, and technical partnerships while racking up steep losses.
With a market cap of $4 billion, X-Energy might seem pricey at 19 times this year's sales. But from 2025 to 2028, analysts expect its revenue to surge from $109 million to $1.24 billion as it locks in more government and enterprise customers ahead of its first commercial deployments.
Could X-Energy be a millionaire-maker stock?
That outlook is rosy, but X-Energy still needs to clear some major hurdles. It still needs to ramp up the production of its own proprietary TRISO pebbles to power its SMRs, and it needs the Nuclear Regulatory Commission (NRC) to approve its unique reactor designs.
X-Energy might seem more reasonably valued at 3.2 times its 2028 sales, but I'd like to see more green shoots appear before I consider it a millionaire-maker stock. For now, I think it will remain a speculative nuclear play that could struggle to climb back above its IPO price.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.