On Friday, Citi reiterated its Neutral stance on shares of Oklo (NYSE: OKLO) with a consistent price target of $10.00. The firm's analysis followed Oklo's recent report on operational results, which showcased an increase in the customer pipeline to 2.10 gigawatts (GW). This growth includes 750 megawatts (MW) from letters of intent (LOIs) with two data center customers.
Oklo, which is working on deploying a 50MW reactor, has seen favorable market conditions with competitor deals suggesting potential for higher revenue than initially expected. The deals, priced at or above $100 per megawatt-hour (MWh), hint at the possibility of surpassing the $90/MWh previously assumed for Oklo's reactor.
The company's timeline for the first deployment of its reactor remains on track for late 2027. The acquisition of Atomic is viewed as a strategic fit, offering broad applications and a strong demand forecast, contributing to Oklo's growth prospects.
Citi's commentary highlighted the synergies from the Atomic acquisition and the robust interest from customers as positive developments. Moreover, the firm noted Oklo's consistent progress in the Nuclear Regulatory Commission (NRC) process, absence of equity overhang, support from major cloud service providers, and adherence to key financial objectives as factors that reduce investment risk in the company's narrative.
In other recent news, Oklo Inc. has announced a series of significant developments. The company has issued 2.5 million shares following a price milestone, a decision linked to a merger agreement from last year. The issuance is part of the terms agreed upon following Oklo's merger with AltC Acquisition Corp. and Oklo Technologies, Inc.
Furthermore, Oklo has partnered with two leading data center providers to supply up to 750 megawatts of low-carbon power, expanding its customer pipeline to approximately 2,100 MW.
Oklo has also secured an Environmental Compliance Permit for its first commercial advanced fission power plant site at the Idaho National Laboratory. The company's lock-up period has concluded, potentially increasing the stock's market liquidity, and 50% of the Vesting Founder Shares held by the Sponsor, AltC Sponsor LLC, have vested.
In terms of financial oversight, Oklo has switched to Deloitte & Touche LLP as its new independent registered public accounting firm. Coverage of Oklo has been initiated by analysts from B. Riley and Citi, with B. Riley highlighting the potential of the company's advanced nuclear technology, while Citi adopted a neutral stance citing potential regulatory hurdles.
Lastly, Oklo has entered into a Preferred Supplier Agreement with Siemens (ETR:SIEGn) Energy to further commercialize its advanced fission technology.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Oklo's financial position and market performance. Despite Citi's neutral stance, Oklo has demonstrated remarkable market momentum, with a 104.98% price return over the past month and an impressive 219.68% return over the last three months. This aligns with the InvestingPro Tip indicating a "Strong return over the last month" and "Strong return over the last three months."
However, investors should note that Oklo's financial fundamentals present a mixed picture. The company's Price to Book ratio stands at 10.83, which an InvestingPro Tip describes as "Trading at a high Price / Book multiple." This high valuation might be a reflection of market optimism about Oklo's future prospects, particularly given the positive developments in its customer pipeline and potential revenue opportunities mentioned in the article.
It's worth noting that Oklo is not currently profitable, with an adjusted operating income of -$37.09 million over the last twelve months. This aligns with another InvestingPro Tip stating that "Analysts do not anticipate the company will be profitable this year." However, the company's strong cash position, as indicated by the tip "Holds more cash than debt on its balance sheet," may provide some financial flexibility as it works towards its 2027 reactor deployment target.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for Oklo, providing a deeper understanding of the company's financial health and market position.
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