Key Points
Oklo reported a big quarterly loss and plans to issue shares worth $1 billion to raise funds.
All eyes are now on the July 4 deadline, which could decide where Oklo stock heads next.
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Shares of Oklo (NYSE: OKLO) fell for the second straight day, trading 4% lower as of 2 p.m. ET Thursday.
At least one analyst raised their price target on Oklo today, but the nuclear energy stock is facing a continued sell-off following its first-quarter earnings report and a significant new regulatory filing that has spooked some investors.
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Why is Oklo stock falling?
Analysts at Citi raised Oklo's price target to $76 per share from $73.5, implying roughly 9% upside from the stock's May 13 closing price.
For a stock that has delivered 100% returns over the past year, Citi's target signals limited near-term upside and reinforces a growing concern among investors: has the stock risen too fast, too soon?
Oklo's numbers, which were announced on May 12 after market close, anyway failed to impress investors. The company, which is building fission nuclear plants called Aurora powerhouses, reported a significantly higher net loss of $33 million versus $9.8 million in the year-ago quarter as costs shot up.
To be fair, Oklo hasn't generated its first revenue yet, so a loss is understandable. What has caught investors off guard, though, is the company filing for yet another stock offering.
Besides announcing earnings, Oklo also announced a $1 billion equity offering and said it will sell shares over time. That immediately raises share dilution concerns and is the biggest reason behind the stock's drop.
Is it time to buy Oklo stock?
The next few weeks are crucial for Oklo as it nears a July 4 deadline to achieve criticality (self-sustaining nuclear chain reaction) for its Groves Isotope Test Reactor in Texas. If a reactor attains sustained criticality, it means it is stable and can work in real-world conditions.
It's an important milestone and could prove to be a major catalyst for Oklo stock if it meets the deadline. Oklo isn't a run-of-the-mill company. It is involved in several nuclear energy programs of the U.S. Department of Energy, is building several reactors as well as nuclear fuel recycling facilities, and has partnerships with tech giants like Meta and Nvidia.
The company, thoug,h could still take years to deploy its first powerhouse and generate its first revenue from the sale of electricity. That's something investors must keep in mind before betting on Oklo stock.
Should you buy stock in Oklo right now?
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Citigroup is an advertising partner of Motley Fool Money. Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
