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Cameco's Premium Valuation: What's the Right Strategy for Investors?
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Key Takeaways
Cameco posted lower Q3 revenues and sales volumes but saw adjusted earnings rise 17% year over year.
The company reaffirmed its Cigar Lake outlook and expects it to offset part of McArthur River's shortfall.
Cameco raised its 2025 uranium delivery target to 32-34 million pounds with revenue guidance up to CAD 3.55B.
Cameco ((CCJ - Free Report) ) remains fundamentally strong, supported by the long-term outlook for uranium and its strategic investments in increasing production. As a key player in the global nuclear energy supply chain, the company is well-positioned to benefit from the growing demand for clean energy solutions.
CCJ stock is currently trading at a forward price-to-sales ratio of 15.82, far above the Zacks Mining - Miscellaneous industry’s 1.44. Its Value Score of F also suggests an expensive valuation.
Image Source: Zacks Investment Research
Despite trading at such a premium, Cameco is trading lower than uranium peers, Energy Fuels ((UUUU - Free Report) ), which is currently trading at a forward price-to-sales ratio of 42.22 and Uranium Energy ((UEC - Free Report) ), which is trading at a loftier 70.29.
Cameco has gained 76.9% so far this year, outpacing the industry’s 31.6% growth. The Zacks Basic Materials sector has rallied 25.3% and the S&P 500 has risen 19.3% in the same time frame.
Energy Fuels and Uranium Energy have outperformed Cameco, gaining 202% and 104%, respectively, year to date.
Image Source: Zacks Investment Research
Cameco Delivered Mixed Q3 Results
Cameco’s third-quarter 2025 total revenues were down 14.7% year over year to CAD 615 million ($446 million) due to the volume declines in both segments.
The company sold 6.1 million pounds of uranium, 16% lower than in the third quarter of 2024. This decline, somewhat offset by 4% uptick in the Canadian dollar average realized price due to the impact of fixed-price contracts on the portfolio, led to a 12.8% drop in uranium revenues to CAD 523 million ($379 million).
Cameco reported a 2% increase in uranium production to 4.4 million pounds. CCJ’s share of production from Cigar Lake was 2.2 million pounds (up 47% year over year) and from McArthur River/Key Lake was 2.2 million pounds (down 21%).
In Fuel Services, production was down 3% year over year to 3.1 million kgUs while sales volume plunged 46% to 1.9 million kgUs. The segment witnessed a 24% drop in revenues to CAD 91 million (CAD 66 million), as gains from a 42% increase in average realized prices were offset by lower volumes.
Total cost of sales fell 20% to around CAD 385 million ($279 million) due to lower volumes. Cameco’s adjusted earnings gained 17% year over year to five cents per share in the third quarter.
The company’s share of Westinghouse’s adjusted EBITDA was $124 million in the quarter compared with $122 million in the prior-year quarter. In October 2025, Westinghouse received the cash associated with its participation in the construction project for two nuclear reactors at the Dukovany power plant in the Czech Republic, led by Korea Hydro & Nuclear Power. Cameco received $171.5 million, representing its 49% share.
CCJ Maintains McArthur River Outlook, Upbeat on Cigar Lake
Cameco holds a 69.805% stake in the McArthur River mine and 83.33% in the Key Lake mill. McArthur River is known as the largest high-grade uranium mine globally and Key Lake is the world’s largest uranium mill. CCJ also holds a 54.547% stake in Cigar Lake, the world’s highest-grade uranium mine.
Cameco had earlier revised its 2025 production outlook from the McArthur River mine due to development delays in transitioning the mine to new mining areas, as well as slower-than-anticipated ground freezing. Its share of production from the operation is projected at 9.8-10.5 million pounds.
CCJ’s expected share from the Cigar Lake mine is maintained at 9.8 million pounds. Backed by Cigar Lake’s upbeat performance so far, Cameco expects it will likely help set off up to 1 million pounds (100% basis) of the production shortfall at the McArthur River.
Cameco Tweaks 2025 Uranium Deliveries Target
Cameco revised its full-year target of uranium deliveries to 32–34 million pounds, from its prior stated 31-34 million pounds. In 2024, CCJ delivered 33.6 million pounds of uranium. The company has delivered 21.8 million pounds of uranium so far in 2025.
For 2025, uranium revenues are projected at CAD 2.8–3.0 billion, based on an average realized price of approximately $87.00 per pound.
In the fuel services segment, CCJ plans to produce between 13 million and 14 million kgU in 2025. Fuel services revenues are projected at $500-$550 million for 2025. This takes the total revenue guidance for 2025 to CAD 3.3-3.550 billion. The company had reported CAD 3.136 billion in revenues in 2024.
CCJ Sees Downward Earnings Revision Activity
The Zacks Consensus Estimate for Cameco’s earnings for both fiscal 2025 and 2026 has moved south over the past 60 days, as shown in the chart below.
Image Source: Zacks Investment Research
Despite the revisions, the consensus estimate for Cameco’s earnings for fiscal 2025 indicates year-over-year growth of 96%. The same for 2026 implies growth of 54.6%.
Image Source: Zacks Investment Research
Cameco’s Debt Levels Higher Than Peers
At the end of the third quarter, CCJ had C$779 million ($565 million) in cash and cash equivalents, and C$1 billion ($725 million) in long-term debt and a $1 billion ($725 million) undrawn revolving credit facility.
CCJ had a total debt to total capital ratio of 0.13 as of June 30, 2025. Meanwhile, Energy Fuels and Uranium Energy have debt-free balance sheets.
CCJ Positioned to Gain on Global Focus on Nuclear Energy
CCJ continues to invest in increasing production and capitalizing on market opportunities. Cameco is extending Cigar Lake’s mine life to 2036 and ramping McArthur River/Key Lake output toward its licensed annual capacity of 25 million pounds.
Geopolitical events, energy security concerns and the global focus on the climate crisis, amid rising demand for low-carbon energy, have created tailwinds for the nuclear power industry. Given Cameco’s low-cost and high-grade assets and diversified portfolio spanning the nuclear fuel cycle, it is well-positioned to capitalize on these trends. Also, the U.S. Geological Survey’s addition of uranium to its 2025 Critical Minerals List further highlights its strategic importance for national security and domestic supply chains.
Our Final Take on Cameco Stock
Supported by a strong balance sheet, the company is making strategic investments to enhance its capacity to capitalize on the anticipated surge in uranium demand. However, new investors can wait for a better entry point, considering the premium valuation and the downward estimate revisions. The stock currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Cameco's Premium Valuation: What's the Right Strategy for Investors?
Key Takeaways
Cameco ((CCJ - Free Report) ) remains fundamentally strong, supported by the long-term outlook for uranium and its strategic investments in increasing production. As a key player in the global nuclear energy supply chain, the company is well-positioned to benefit from the growing demand for clean energy solutions.
CCJ stock is currently trading at a forward price-to-sales ratio of 15.82, far above the Zacks Mining - Miscellaneous industry’s 1.44. Its Value Score of F also suggests an expensive valuation.
Despite trading at such a premium, Cameco is trading lower than uranium peers, Energy Fuels ((UUUU - Free Report) ), which is currently trading at a forward price-to-sales ratio of 42.22 and Uranium Energy ((UEC - Free Report) ), which is trading at a loftier 70.29.
CCJ Stock’s Performance Outpaces Industry, Lags Peers
Cameco has gained 76.9% so far this year, outpacing the industry’s 31.6% growth. The Zacks Basic Materials sector has rallied 25.3% and the S&P 500 has risen 19.3% in the same time frame.
Energy Fuels and Uranium Energy have outperformed Cameco, gaining 202% and 104%, respectively, year to date.
Cameco Delivered Mixed Q3 Results
Cameco’s third-quarter 2025 total revenues were down 14.7% year over year to CAD 615 million ($446 million) due to the volume declines in both segments.
The company sold 6.1 million pounds of uranium, 16% lower than in the third quarter of 2024. This decline, somewhat offset by 4% uptick in the Canadian dollar average realized price due to the impact of fixed-price contracts on the portfolio, led to a 12.8% drop in uranium revenues to CAD 523 million ($379 million).
Cameco reported a 2% increase in uranium production to 4.4 million pounds. CCJ’s share of production from Cigar Lake was 2.2 million pounds (up 47% year over year) and from McArthur River/Key Lake was 2.2 million pounds (down 21%).
In Fuel Services, production was down 3% year over year to 3.1 million kgUs while sales volume plunged 46% to 1.9 million kgUs. The segment witnessed a 24% drop in revenues to CAD 91 million (CAD 66 million), as gains from a 42% increase in average realized prices were offset by lower volumes.
Total cost of sales fell 20% to around CAD 385 million ($279 million) due to lower volumes. Cameco’s adjusted earnings gained 17% year over year to five cents per share in the third quarter.
The company’s share of Westinghouse’s adjusted EBITDA was $124 million in the quarter compared with $122 million in the prior-year quarter. In October 2025, Westinghouse received the cash associated with its participation in the construction project for two nuclear reactors at the Dukovany power plant in the Czech Republic, led by Korea Hydro & Nuclear Power. Cameco received $171.5 million, representing its 49% share.
CCJ Maintains McArthur River Outlook, Upbeat on Cigar Lake
Cameco holds a 69.805% stake in the McArthur River mine and 83.33% in the Key Lake mill. McArthur River is known as the largest high-grade uranium mine globally and Key Lake is the world’s largest uranium mill. CCJ also holds a 54.547% stake in Cigar Lake, the world’s highest-grade uranium mine.
Cameco had earlier revised its 2025 production outlook from the McArthur River mine due to development delays in transitioning the mine to new mining areas, as well as slower-than-anticipated ground freezing. Its share of production from the operation is projected at 9.8-10.5 million pounds.
CCJ’s expected share from the Cigar Lake mine is maintained at 9.8 million pounds. Backed by Cigar Lake’s upbeat performance so far, Cameco expects it will likely help set off up to 1 million pounds (100% basis) of the production shortfall at the McArthur River.
Cameco Tweaks 2025 Uranium Deliveries Target
Cameco revised its full-year target of uranium deliveries to 32–34 million pounds, from its prior stated 31-34 million pounds. In 2024, CCJ delivered 33.6 million pounds of uranium. The company has delivered 21.8 million pounds of uranium so far in 2025.
For 2025, uranium revenues are projected at CAD 2.8–3.0 billion, based on an average realized price of approximately $87.00 per pound.
In the fuel services segment, CCJ plans to produce between 13 million and 14 million kgU in 2025. Fuel services revenues are projected at $500-$550 million for 2025. This takes the total revenue guidance for 2025 to CAD 3.3-3.550 billion. The company had reported CAD 3.136 billion in revenues in 2024.
CCJ Sees Downward Earnings Revision Activity
The Zacks Consensus Estimate for Cameco’s earnings for both fiscal 2025 and 2026 has moved south over the past 60 days, as shown in the chart below.
Image Source: Zacks Investment Research
Despite the revisions, the consensus estimate for Cameco’s earnings for fiscal 2025 indicates year-over-year growth of 96%. The same for 2026 implies growth of 54.6%.
Image Source: Zacks Investment Research
Cameco’s Debt Levels Higher Than Peers
At the end of the third quarter, CCJ had C$779 million ($565 million) in cash and cash equivalents, and C$1 billion ($725 million) in long-term debt and a $1 billion ($725 million) undrawn revolving credit facility.
CCJ had a total debt to total capital ratio of 0.13 as of June 30, 2025. Meanwhile, Energy Fuels and Uranium Energy have debt-free balance sheets.
CCJ Positioned to Gain on Global Focus on Nuclear Energy
CCJ continues to invest in increasing production and capitalizing on market opportunities. Cameco is extending Cigar Lake’s mine life to 2036 and ramping McArthur River/Key Lake output toward its licensed annual capacity of 25 million pounds.
Geopolitical events, energy security concerns and the global focus on the climate crisis, amid rising demand for low-carbon energy, have created tailwinds for the nuclear power industry. Given Cameco’s low-cost and high-grade assets and diversified portfolio spanning the nuclear fuel cycle, it is well-positioned to capitalize on these trends. Also, the U.S. Geological Survey’s addition of uranium to its 2025 Critical Minerals List further highlights its strategic importance for national security and domestic supply chains.
Our Final Take on Cameco Stock
Supported by a strong balance sheet, the company is making strategic investments to enhance its capacity to capitalize on the anticipated surge in uranium demand. However, new investors can wait for a better entry point, considering the premium valuation and the downward estimate revisions. The stock currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.