Valued at $1.29 billion by market cap, Centrus Energy Corp. (LEU) is a supplier of nuclear fuel and services for the nuclear power industry. The Maryland-based company is a component of the small-cap benchmark Russell 2000 Index (RUT), and operates through two main segments: low-enriched uranium (LEU), and technical solutions.
Thanks to revived interest in nuclear energy as a cleaner fuel source amid the artifical intelligence (AI) data center boom, Centrus stock has outperformed the broader equities market this year. LEU is up 44% year-to-date, and has spiked 121% over the past three months alone.
However, the volatile uranium stock has pulled back by more than 30% from its recent highs, set last month - allowing investors to buy the dip on this nuclear energy name.
Centrus Reports Mixed Q3 Earnings
Centrus reported its third-quarter earnings results on Oct. 28, with the company taking a loss of $5 million, or $0.30 per share - a miss compared to analysts' estimated earnings of $0.18 per share, and down sharply from last year’s profit of $0.52 per share.
On the other hand, revenue for the quarter totaled $57.7 million, surpassing estimates of $56.5 million. The top line rose 12.5% from the same quarter last year.
"Centrus has made enormous progress in recent months in securing two critical awards from the Department of Energy as well as $2.0 billion in contingent commitments from our customers to support a potential expansion of our Ohio enrichment facility," noted President and CEO Amir Vexler.
Centrus closed the quarter with a consolidated cash balance of $194.3 million, and a backlog of $3.8 billion, which extends to 2040.
LEU Looks to Expand Domestically
Centrus Energy stock took a hit in mid-November after Russia's regulator canceled the export license for its main supplier, TENEX, amid rising geopolitical tensions. However, management followed up by announcing the resumption of centrifuge manufacturing activities and the expansion of its manufacturing capacity at its Oak Ridge, Tennessee, facility.
The company also plans a large-scale expansion of uranium enrichment at its American Centrifuge Plant in Ohio, with CEO Vexler describing the planned investment as “a multi-billion dollar public and private commitment to reestablishing America's uranium enrichment capacity at scale while reducing our dependence on foreign nations.”
Analysts Back LEU Stock
Analysts are bullish on the uranium stock, with a consensus “Moderate Buy” rating - though it should be noted coverage is light, with only three analysts tracking the shares. The mean price target is $112.67, reflecting an upside potential of 43.9% from Friday's close.
While the nuclear energy stock is likely to remain volatile amid ongoing tensions with Russia and ongoing regulatory challenges, investors who have been waiting for an entry point on LEU may want to consider scooping up shares on this latest dip.
