Valued at $791.8 million by market cap, Energy Fuels (UUUU) is engaged in the extraction, recovery, recycling, exploration, and sale of uranium mineral properties in the U.S. It produces and sells vanadium pentoxide, rare earth elements, and heavy mineral sands, such as zircon and monazite.
Energy Fuels has trailed the broader markets by a wide margin in the past decade, falling over 35%. Let’s see if the uranium stock is a good buy at current multiples.
How Did Energy Fuels Perform in Q2 of 2024?
Energy Fuels is focused on capitalizing on uranium market opportunities, as it profitably sold an additional 100,000 pounds of the commodity on the spot market and signed a new long-term sales contract with a U.S. nuclear facility at supportive pricing in Q2 of 2024. It mined uranium from three conventional mines and expects large-scale uranium processing to begin at its White Mesa location in Utah in the current quarter.
With $200 million of liquidity and no debt, Energy Fuels has the flexibility to support its cash burn rate, given it incurred a net loss of $6 million in Q2 of 2024. Its uranium sale in the spot market at a realized profit of $85.90 per pound allowed the company to generate $8.59 million in sales and a gross profit of $4.91 million, indicating a margin of 57%.
Additionally, Energy Fuels added a fourth long-term uranium sales contract to its existing portfolio, under which it will deliver between 270,000 and 330,000 pounds of uranium between 2026 and 2027.
Energy Fuels ended the quarter with 285,000 pounds of finished uranium and 653,000 pounds of ore and raw materials. As it mines additional ore, Energy Fuels expects its uranium inventories to increase.
Energy Fuels Acquires RadTran
Earlier this month, Energy Fuels acquired RadTran, a company that separates critical radioisotopes to accelerate the development and production of medical isotopes used in cancer treatments. RadTran currently separates radium-226 and radium-228 from uranium and thorium process streams.
Mark Chalmers, President and CEO of Energy Fuels, said, "With this Acquisition, we will be combining our unique processing capabilities at the White Mesa Mill, the only permitted and operating uranium mill in the United States, with over 40 years of chemical and metal separations experience, with RadTran's intellectual property and medical isotope experience in radionuclide separation and concentration, which we believe will position Energy Fuels to be a leader in this developing industry.”
Energy Fuels will recover valuable isotopes from existing process streams, which will be recycled back into the market and repurposed for life-saving cancer treatments. Energy Fuels will pay RadTran $1.5 million in cash and $1.5 million in stock, a 2% royalty on future revenues from the sale of produced radium, and certain contractual commitments.
What's the Target Price for UUUU Stock?
The rising demand for uranium is set to expand globally as countries focus on developing cleaner nuclear reactors. Specifically, Energy Fuels is forecast to increase its revenue from $38 million in 2023 to $50 million in 2024, with continued growth to $164 million in 2025.
Out of the five analysts covering Energy Fuels stock, three recommend “strong buy,” one recommends “moderate buy,” and one recommends “hold,” for a “moderate buy” consensus.
The average 12-month target price for UUUU stock is $9.34, indicating an upside potential of more than 87% from current prices.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
