Last week, I chatted about how the market’s view on nuclear energy has flipped, creating a sweet spot for savvy investors. Now, I’m diving into a company that might be slipping under the radar despite a recent stock surge.
When flashy new trends catch everyone’s eye, it’s easy to miss solid mid-sized companies. People tend to chase after startups or big household names. But Centrus Energy (NYSE: LEU) isn’t about the hype; it’s about real momentum and contracts.
Centrus finds itself at the heart of a critical national focus: reviving uranium enrichment in the U.S. Here’s the lowdown.
Last quarter, Centrus pulled in $154.5 million in revenue, down from $189 million the previous year. Seems like a red flag, right? Not really. Their net income stayed steady at $28.9 million, and margins even improved.
More importantly, Centrus wrapped up Phase 2 of a DOE contract, delivering 900 kilograms of enriched uranium right on the dot. The DOE jumped on part of Phase 3 too, adding $110 million more through mid-2026.
This isn’t just about snagging contracts. It’s a pivotal moment showing Centrus can deliver a complex product that only a handful of firms worldwide can offer, and that the U.S. is ready to support domestic enrichment.
The company flaunts a $3.6 billion backlog into 2040, with over $2.7 billion from its LEU segment. Plus, they’ve got $833 million in cash, up from $671 million just six months ago—a hefty sum for growth.
Naturally, investors have caught on. The stock soared from about $60 in May to around $220 now—that’s close to a fourfold increase in three months.
But does this mean the stock is overpriced now? Let’s crunch the numbers.
Centrus sports an EV/NAV ratio of 18.14, higher than the peer average of 12.32, indicating a premium for expected growth. Their free cash flow figures justify the premium—an average FCF/NAV of 4.77%, way above the universe average of -26.98%. Even better, Centrus has consistently grown its free cash flow more reliably than the broader market.
Such consistency is a rare gem in this sector. Yet, with the stock up almost 300% recently, the straightforward gains are likely snagged. It’s moved from a contrarian bet to a momentum play backed by government funds and rising demand.
Believing in the nuclear resurgence? Centrus is still a solid option. But remember, its valuation already echoes a lot of optimism. The Value Meter marks Centrus as “Appropriately Valued.”
Which stock should we put through The Value Meter next? Share your ticker symbol(s) in the comments!
