Shares of Oklo (OKLO 1.61%), a start-up developer of “micro” nuclear reactors, suffered a downgrade to neutral at the hands of Seaport Global analyst Jeff Campbell, as StreetInsider.com reports today.

The stock fell nearly 6% in early trading, but as of 10:40 a.m., trades down only 1.3%.

Image source: Getty Images.

Valuation matters

Oklo stock has been on a tear this year, rising nearly 16-fold over 12 months, and Campbell acknowledged the company’s recent groundbreaking for its first nuclear reactor pilot project at Idaho National Laboratory is a positive for the stock.

Nevertheless, the rapid rise of Oklo stock — in the absence of profit, or indeed revenue, and with most analysts forecasting nothing but losses for the next five years — does give the analyst pause.

Says Campbell: “While we continue to see a number of positives in Oklo’s business development, we are stepping to the sidelines for now, based on the current stock valuation.”

How much is Oklo stock worth?

That’s a curious statement, though. As I just mentioned, Oklo stock is up 15x in value over 12 months, and now costs more than $20 billion.

Campbell apparently thinks this is too much to pay for the stock, but the question must be asked: $20 billion is too much to pay for a start-up stock with no profits. Agreed.

But what about when Oklo stock cost half as much as it did today — $69 a share? Wasn’t $10 billion also too much to pay for a profitless stock? Or how about half that amount — $34.50? Was $5 billion perhaps too much to pay?

The thing that should worry Oklo investors today: Once Oklo stock stops skyrocketing and investors start questioning the valuation, there’s almost no limit to how low this stock could go.