Can Fluor Transform Into a Major Wealth Generator?

Understanding Fluor’s Strategic Shift

Fluor Corporation (NYSE: FLR) operates as one of the globe’s largest providers of engineering and construction services. The company has undergone a significant operational transformation in recent years, moving away from fixed-price contract models that had severely impacted profitability. Today, Fluor is increasingly relying on reimbursable contracts—arrangements where the company is compensated for actual costs incurred—positioning itself for more stable earnings patterns going forward.

This strategic pivot reflects lessons learned from past difficulties. The engineering and construction sector had hammered Fluor with cost overruns on fixed-price engagements, forcing the company to absorb financial losses. The transition to cost-reimbursable work represents a meaningful course correction, though investors should understand that construction demand itself follows cyclical patterns.

The NuScale Power Question

An important piece of Fluor’s recent narrative involves its early investment in NuScale Power (NYSE: SMR), a company pioneering small modular reactor (SMR) technology. This nuclear innovation space has captured significant investor attention as the energy sector explores new solutions.

Fluor capitalized on favorable market conditions by selling a portion of its NuScale Power stake for approximately $600 million in October 2025, when the SMR company’s shares were trading near 52-week peaks. The company intends to liquidate its remaining holding by mid-2026.

However, several factors cloud this narrative. NuScale Power hasn’t yet constructed or commercialized a single reactor unit, creating substantial execution risk. While the stock appreciated dramatically during 2025—reaching nearly 200% gains at one point—it has since declined about 10% for the year as market enthusiasm waned. Given this volatility, the remaining stake’s future value remains uncertain and likely diminished from October valuations.

Importantly, proceeds from Fluor’s divestiture won’t flow directly to shareholders as special distributions. Instead, the capital will be deployed either to strengthen the balance sheet or reinvest in core operations—limiting the immediate shareholder benefit from this transaction.

The Numbers Tell a Mixed Story

At the end of Q3 2025, Fluor reported a project backlog of $28.2 billion, with 82% composed of reimbursable-model work. This composition reflects the company’s successful pivot away from fixed-price risk. Yet the backlog itself declined 10% year-over-year—a warning sign that warrants attention.

The volatility stems partly from Fluor’s accounting treatment of its NuScale Power position, which creates GAAP earnings swings unrelated to underlying operational performance. Additionally, the construction industry’s inherent cyclicality means demand fluctuations are difficult to predict over medium-term horizons.

From a valuation perspective, Fluor presents challenges. Historical losses render traditional price-to-earnings ratios unreliable. The price-to-sales metric, meanwhile, sits above its five-year average—suggesting potential overvaluation despite operational improvements at the fundamental level.

Is This a Wealth-Builder?

Fluor’s transformation is genuine, and the company’s shift toward reimbursable contracts does provide a more sustainable earnings foundation. These are legitimate positives. However, transformation progress alone doesn’t justify aggressive investment positioning, particularly for conservative-minded investors seeking stability.

The NuScale Power connection adds another layer of uncertainty rather than clarity. Combined with industry cyclicality, volatile GAAP earnings, and valuation headwinds, Fluor appears better suited for investors with higher risk tolerance and shorter investment horizons.

The stock’s 2025 performance—whipsawing between 37% declines and 15% gains, then retreating again—reflects this underlying instability. While the company’s fundamentals are improving, the path from current valuations to meaningful wealth creation remains unclear and likely requires years of flawless execution across multiple fronts.