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LEU's Premium Valuation: Is the Stock a Buy, Hold or Sell Now?
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Key Takeaways
Centrus Energy plans a major Piketon plant expansion to boost HALEU and uranium output.
The company raised $1.2B and secured $2B in commitments to fund enrichment expansion.
Centrus Energy completed DOE contract milestones and extended HALEU production to 2026.
Centrus Energy (LEU - Free Report) remains fundamentally strong, supported by the favorable long-term outlook for uranium and its strategic investments in increasing production. It is positioning itself to become a key player in the United States’ drive for nuclear energy independence.
LEU stock is currently trading at a forward price-to-sales ratio of 12.68, way above the Zacks Mining – Non Ferrous industry’s 3.36 and five-year median of 2.01. Its Value Score of F also suggests an expensive valuation.
Image Source: Zacks Investment Research
Despite the premium, Centrus Energy is valued below peers like Cameco (CCJ - Free Report) , which is currently trading at a forward price-to-sales ratio of 14.54 and Energy Fuels (UUUU - Free Report) , which is currently trading at a loftier 35.76.
Image Source: Zacks Investment Research
LEU Stock’s Performance Outpaces Industry & Peers
Centrus Energy has skyrocketed 431.2% so far this year against the industry’s 6.3% decline. The Zacks Basic Materials sector has gained 8.2%, while the S&P 500 has risen 20.2% in the same time frame.
LEU Stock’s YTD Performance vs. Industry, Sector & S&P 500
Image Source: Zacks Investment Research
Meanwhile, peers Cameco and Energy Fuels gained 63.7% and 205.9% year to date, respectively.
Image Source: Zacks Investment Research
Is Centrus Energy’s Premium Valuation Justified?
LEU Remains Focused on Enhancing U.S Enrichment Capacity
Last month, LEU unveiled plans to significantly expand its uranium enrichment plant in Piketon, OH, to boost the production of Low-Enriched Uranium and High-Assay, Low-Enriched Uranium (HALEU). The scale of this project depends on Centrus Energy securing funding from the U.S. Department of Energy (DOE) and will mark a significant step in restoring America’s ability to enrich uranium at scale.
To prepare for this expansion, Centrus Energy has already raised more than $1.2 billion through two convertible note offerings over the past 12 months and has secured contingent purchase commitments of more than $2 billion from utility customers. The company also signed a Memorandum of Understanding (MOU) with Korea Hydro & Nuclear Power (“KHNP”) and POSCO International to bring private capital into the Piketon expansion.
Importantly, Centrus Energy remains the only U.S.-based enricher that manufactures centrifuges and related equipment exclusively with American technology. This sets it apart from foreign, state-owned enterprises that control nearly all global enrichment capacity using centrifuge technologies manufactured overseas.
Centrus Energy Has Successfully Met DOE Contract Milestones
Centrus Energy has so far delivered 920 kilograms of HALEU per its contract with the DOE, completing Phase I and Phase II. It has entered Phase III and secured a contract extension from the DOE authorizing an additional year of production through June 30, 2026. The contract includes provisions for up to eight additional years of production beyond that, subject to funding and DOE discretion.
LEU’s Q2 Results Reflect Absence of Uranium Sales
Centrus Energy posted total revenues of $155 million in the second quarter of 2025, down 18% year over year. Revenues for the Low-Enriched Uranium segment declined 26% year over year to $125.7 million. This was mainly attributed to the absence of uranium sales due to lower prices. The Technical Solutions segment’s revenues, however, jumped 48% to $28.8 million, driven by a $9.1 million boost from the HALEU Operation Contract. Earnings were down 16% to $1.59 per share, despite higher gross profit owing to increased selling, general and administrative expenses and interest expenses.
Centrus Energy ended the quarter with a $3.6-billion revenue backlog, which includes long-term sales contracts with major utilities through 2040. Uranium prices have recently gained steam and are currently at $82 per pound, fueled by growing expectations of expanded nuclear power capacity, fresh purchases by physical uranium funds and policy initiatives. This will likely reflect on Centrus Energy’s top-line performance in the forthcoming quarters.
LEU’s Elevated Debt Position is Concerning
LEU had a total debt-to-total capital ratio of 0.55 as of June 30, 2025, higher than the industry. Meanwhile, Cameco has a total debt-to-total capital ratio of 0.13, while Energy Fuels boasts a debt-free balance sheet.
Centrus Energy’s Estimates Move Up, But Suggest Y/Y Declines
The Zacks Consensus Estimate for earnings per share for 2025 and 2026 has been revised upward over the past 90 days. Despite this upgrade, the estimate for Centrus Energy’s 2025 earnings is pegged at $4.32 per share, indicating a 3.4% year-over-year decline. The same for 2026 is $3.25, indicating a decline of 24.7%.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
HALEU Remains the Cornerstone for LEU’s LT Growth Strategy
Centrus Energy provides the enrichment component of low-enriched uranium, which is measured in SWUs, to utilities that operate commercial nuclear power plants. Its current facilities can process 3.5 million SWU annually, which can be scaled to 7 million SWU.
The company has demonstrated success in producing HALEU and is the only licensed producer in the Western world. HALEU demand is expected to surge to power existing reactors and a new generation of advanced reactors. While low-enriched uranium contains uranium concentration below 5%, HALEU contains uranium enriched to between 5% and 20%. It has an edge offering improved efficiency, extended fuel cycles and lower waste.
The HALEU market value is projected to reach $0.26 billion in 2025 and grow thereafter to $6.14 billion by 2035. Centrus Energy is planning to expand production capacity in Ohio so that it can meet the domestic demand for HALEU as well as low-enriched uranium.
Our Final Take on Centrus Energy Stock
As the only company with a Nuclear Regulatory Commission license for HALEU enrichment, Centrus Energy has a clear first-mover advantage to capitalize on the expected surge in demand. Investors holding LEU shares should continue to do so to benefit from the solid long-term fundamentals. However, new investors can wait for a better entry point, considering the premium valuation, projected decline in earnings for the current year and next, as well as its debt levels that are higher than the industry. Centrus Energy stock currently carries a Zacks Rank #3 (Hold).
Image: Shutterstock
LEU's Premium Valuation: Is the Stock a Buy, Hold or Sell Now?
Key Takeaways
Centrus Energy (LEU - Free Report) remains fundamentally strong, supported by the favorable long-term outlook for uranium and its strategic investments in increasing production. It is positioning itself to become a key player in the United States’ drive for nuclear energy independence.
LEU stock is currently trading at a forward price-to-sales ratio of 12.68, way above the Zacks Mining – Non Ferrous industry’s 3.36 and five-year median of 2.01. Its Value Score of F also suggests an expensive valuation.
Despite the premium, Centrus Energy is valued below peers like Cameco (CCJ - Free Report) , which is currently trading at a forward price-to-sales ratio of 14.54 and Energy Fuels (UUUU - Free Report) , which is currently trading at a loftier 35.76.
LEU Stock’s Performance Outpaces Industry & Peers
Centrus Energy has skyrocketed 431.2% so far this year against the industry’s 6.3% decline. The Zacks Basic Materials sector has gained 8.2%, while the S&P 500 has risen 20.2% in the same time frame.
LEU Stock’s YTD Performance vs. Industry, Sector & S&P 500
Image Source: Zacks Investment Research
Meanwhile, peers Cameco and Energy Fuels gained 63.7% and 205.9% year to date, respectively.
Image Source: Zacks Investment Research
Is Centrus Energy’s Premium Valuation Justified?
LEU Remains Focused on Enhancing U.S Enrichment Capacity
Last month, LEU unveiled plans to significantly expand its uranium enrichment plant in Piketon, OH, to boost the production of Low-Enriched Uranium and High-Assay, Low-Enriched Uranium (HALEU). The scale of this project depends on Centrus Energy securing funding from the U.S. Department of Energy (DOE) and will mark a significant step in restoring America’s ability to enrich uranium at scale.
To prepare for this expansion, Centrus Energy has already raised more than $1.2 billion through two convertible note offerings over the past 12 months and has secured contingent purchase commitments of more than $2 billion from utility customers. The company also signed a Memorandum of Understanding (MOU) with Korea Hydro & Nuclear Power (“KHNP”) and POSCO International to bring private capital into the Piketon expansion.
Importantly, Centrus Energy remains the only U.S.-based enricher that manufactures centrifuges and related equipment exclusively with American technology. This sets it apart from foreign, state-owned enterprises that control nearly all global enrichment capacity using centrifuge technologies manufactured overseas.
Centrus Energy Has Successfully Met DOE Contract Milestones
Centrus Energy has so far delivered 920 kilograms of HALEU per its contract with the DOE, completing Phase I and Phase II. It has entered Phase III and secured a contract extension from the DOE authorizing an additional year of production through June 30, 2026. The contract includes provisions for up to eight additional years of production beyond that, subject to funding and DOE discretion.
LEU’s Q2 Results Reflect Absence of Uranium Sales
Centrus Energy posted total revenues of $155 million in the second quarter of 2025, down 18% year over year. Revenues for the Low-Enriched Uranium segment declined 26% year over year to $125.7 million. This was mainly attributed to the absence of uranium sales due to lower prices. The Technical Solutions segment’s revenues, however, jumped 48% to $28.8 million, driven by a $9.1 million boost from the HALEU Operation Contract.
Earnings were down 16% to $1.59 per share, despite higher gross profit owing to increased selling, general and administrative expenses and interest expenses.
Centrus Energy ended the quarter with a $3.6-billion revenue backlog, which includes long-term sales contracts with major utilities through 2040.
Uranium prices have recently gained steam and are currently at $82 per pound, fueled by growing expectations of expanded nuclear power capacity, fresh purchases by physical uranium funds and policy initiatives. This will likely reflect on Centrus Energy’s top-line performance in the forthcoming quarters.
LEU’s Elevated Debt Position is Concerning
LEU had a total debt-to-total capital ratio of 0.55 as of June 30, 2025, higher than the industry. Meanwhile, Cameco has a total debt-to-total capital ratio of 0.13, while Energy Fuels boasts a debt-free balance sheet.
Centrus Energy’s Estimates Move Up, But Suggest Y/Y Declines
The Zacks Consensus Estimate for earnings per share for 2025 and 2026 has been revised upward over the past 90 days. Despite this upgrade, the estimate for Centrus Energy’s 2025 earnings is pegged at $4.32 per share, indicating a 3.4% year-over-year decline. The same for 2026 is $3.25, indicating a decline of 24.7%.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
HALEU Remains the Cornerstone for LEU’s LT Growth Strategy
Centrus Energy provides the enrichment component of low-enriched uranium, which is measured in SWUs, to utilities that operate commercial nuclear power plants. Its current facilities can process 3.5 million SWU annually, which can be scaled to 7 million SWU.
The company has demonstrated success in producing HALEU and is the only licensed producer in the Western world. HALEU demand is expected to surge to power existing reactors and a new generation of advanced reactors. While low-enriched uranium contains uranium concentration below 5%, HALEU contains uranium enriched to between 5% and 20%. It has an edge offering improved efficiency, extended fuel cycles and lower waste.
The HALEU market value is projected to reach $0.26 billion in 2025 and grow thereafter to $6.14 billion by 2035. Centrus Energy is planning to expand production capacity in Ohio so that it can meet the domestic demand for HALEU as well as low-enriched uranium.
Our Final Take on Centrus Energy Stock
As the only company with a Nuclear Regulatory Commission license for HALEU enrichment, Centrus Energy has a clear first-mover advantage to capitalize on the expected surge in demand. Investors holding LEU shares should continue to do so to benefit from the solid long-term fundamentals.
However, new investors can wait for a better entry point, considering the premium valuation, projected decline in earnings for the current year and next, as well as its debt levels that are higher than the industry. Centrus Energy stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.