Centrus Energy (NYSE: LEU ) is not a common stock. When I look at it, I realize that it is one of those cases where strategic narrative and numbers are intertwined in a very particular way.I am an individual investor with over five years of experience in personal investing, holding a PhD in Economics from UCEMA. My investment approach focuses on value companies with solid long-term potential. I share my knowledge with the community by offering analysis to support individual investors. My articles reflect pe ...

Core Insights - Centrus Energy (LEU) is positioned to become a key player in the U.S. nuclear energy sector, supported by a favorable long-term outlook for uranium and strategic investments in production expansion [1][9][25] - The stock is currently trading at a forward price-to-sales ratio of 12.68, significantly higher than the industry average of 3.36 and the five-year median of 2.01, indicating an expensive valuation [1][2] Financial Performance - Centrus Energy's stock has increased by 431.2% year-to-date, outperforming the industry, which has seen a decline of 6.3% [4] - The company reported total revenues of $155 million in Q2 2025, an 18% decrease year-over-year, primarily due to the absence of uranium sales [15] - Earnings per share fell by 16% to $1.59, despite higher gross profit, due to increased selling, general, and administrative expenses [16] Production and Expansion Plans - Centrus Energy plans to expand its uranium enrichment plant in Piketon, Ohio, to increase production of Low-Enriched Uranium and High-Assay, Low-Enriched Uranium (HALEU) [9][12] - The company has raised over $1.2 billion and secured $2 billion in commitments to fund this expansion [7][12] - Centrus is the only U.S.-based enricher that manufactures centrifuges using American technology, differentiating it from foreign competitors [13] Market Outlook - Uranium prices have recently risen to $82 per pound, driven by expectations of increased nuclear power capacity and policy initiatives [17] - The HALEU market is projected to grow from $0.26 billion in 2025 to $6.14 billion by 2035, with Centrus aiming to meet domestic demand through its expansion plans [23] Debt and Valuation Concerns - Centrus Energy has a total debt-to-total capital ratio of 0.55, which is higher than peers like Cameco (0.13) and Energy Fuels (debt-free) [18] - Despite upward revisions in earnings estimates, the projected earnings for 2025 and 2026 indicate year-over-year declines of 3.4% and 24.7%, respectively [19][20]

Core Insights - Small-cap stocks are gaining significant attention, with some stocks in the iShares Russell 2000 ETF experiencing massive gains this year, outperforming larger-cap stocks like Nvidia and Palantir [1][2]. Small-Cap Performance - The iShares Russell 2000 ETF has increased by 11.2% this year, although it still lags behind the S&P 500 [2]. - On September 18, the Russell 2000 index reached an all-time high for the first time since March 15, 2021, ending a streak of 967 trading days without a new high, which is the second longest in the index's history [3]. Notable Small-Cap Stocks - The Oncology Institute (TOI) has seen a remarkable rise of 1,064% this year, increasing from 31 cents to $3.60 per share [3]. - Better Home & Finance (BETR) and ThredUp (TDUP) also performed well, with gains of 602.6% and 578.1% respectively [7]. - ThredUp is valued at over $1.1 billion and is expected to lose 24 cents per share this year, yet its stock price has risen to $9.44 [5]. Market Dynamics - Many small-cap stocks started the year with low share prices, leading to substantial percentage increases with even small dollar gains [3]. - The average stock in the Russell 2000 index now trades for $37 per share, indicating a shift in market dynamics as small stocks rally [6].

Group 1 - Centrus Energy is a unique investment opportunity as it is one of only two U.S. suppliers licensed to produce low-enriched uranium (LEU) and the only one for high-assay low-enriched uranium (HALEU) [1] - The stock has seen a significant increase, up 323% year-to-date and over 470% year-over-year, but its future growth depends on the company's execution and favorable policy conditions [2] - Centrus operates as a nuclear fuel supplier, providing LEU through long-term purchase agreements, and has recently started operations at the American Centrifuge Plant, the first U.S.-owned enrichment plant to begin production since 1954 [4] Group 2 - The American Centrifuge Plant is currently the only U.S. facility licensed to produce HALEU, which is essential for next-generation reactors, addressing the need for domestic production due to previous reliance on foreign sources [5] - Centrus has a contract with the U.S. Department of Energy to produce HALEU, having delivered 900 kilograms in mid-June, with plans for additional deliveries through June 30, 2026 [6] - The company's market capitalization increased from approximately $684 million to over $5.5 billion between mid-2024 and mid-2025, largely due to policy support and HALEU deliveries, despite a slight decrease in net income during the same period [9]

Core Insights - Centrus Energy's shares surged by 53.7% in September, driven by U.S. government support for domestic nuclear fuel production [1][9] - The U.S. government is implementing policies to boost domestic production of nuclear materials, which benefits Centrus Energy [2][4] Government Support and Industry Impact - The Trump administration announced steps to support domestic nuclear materials production and enrichment on September 15 [4] - U.S. Energy Secretary Chris Wright recommended increasing the strategic uranium reserve to mitigate reliance on Russian supplies, which are set to be banned by 2028 [5][6] Company Expansion Plans - Centrus Energy plans to expand its U.S.-based enrichment plant to enhance production of Low-Enriched Uranium (LEU) and High-Assay, Low-Enriched Uranium (HALEU) [6][8] - The company has raised over $1.2 billion and secured $2 billion in contingent purchase commitments from utilities, although the expansion's scale and timing depend on federal funding [8] Production Capabilities - Centrus is the only Nuclear Regulatory Commission (NRC) licensed producer of HALEU currently operating at scale for both commercial and national security applications [7]

Group 1 - Centrus Energy Corp. (NYSEAMERICAN:LEU) experienced an 11.82% increase in share price from September 25 to October 2, 2025, marking it as one of the top-performing energy stocks for the week [1] - The company's stock reached a 10-year high due to a surge in uranium futures in the US, which exceeded $83 per pound, driven by investor interest and demand for nuclear fuel [2] - Centrus Energy announced plans for a multibillion-dollar expansion of its uranium enrichment facility in Ohio, aimed at increasing nuclear fuel production and reducing reliance on Russian imports, with investment amounts contingent on US Energy Department funding decisions [3]

Group 1: Industry Overview - The war in Ukraine has intensified Russia's control over uranium enrichment, while China is advancing its nuclear ambitions, leading to a divided global landscape [1] - Trade wars and disrupted supply chains are creating rival camps among nations [1] Group 2: Centrus Energy Developments - Centrus Energy is initiating a multi-billion-dollar expansion in Piketon, Ohio, aimed at restoring U.S. industrial-scale uranium enrichment, signaling a move towards energy independence [2] - The Piketon facility is the only domestic site in the U.S. capable of industrial-scale uranium enrichment, highlighting its strategic importance [4] - Centrus has secured $1.2 billion through convertible notes and over $2 billion in global contingent utility commitments, indicating strong financial backing for its expansion [4] Group 3: Financial Performance - Uranium prices have increased from approximately $63.50 per pound in early 2025 to over $80, reflecting strong market demand [3] - Centrus Energy's stock (LEU) has seen a remarkable increase of 438% over the past 52 weeks and 420% year-to-date, significantly outperforming the broader sector [6] - LEU shares are trading at 62.83 times forward adjusted earnings and 12.32 times sales, both metrics exceeding industry averages and historical multiples [6]

Core Insights - Centrus Energy has significantly outperformed the market in 2025, with a stock increase of approximately 295% year-to-date and over 450% year-over-year, compared to the S&P 500's 13% gain [1] - The company's growth potential is indirectly linked to artificial intelligence, as its uranium enrichment could support data centers that power AI technologies [2] - Centrus operates the only U.S.-owned enrichment facility licensed to produce high-assay low-enriched uranium (HALEU), positioning it uniquely in the nuclear fuel industry [6] Business Operations - Centrus has two main business segments: supplying low-enriched uranium (LEU) for current reactors and providing technical services for HALEU production aimed at advanced reactors [4] - The HALEU production segment is expected to offer more long-term growth opportunities, particularly as next-generation reactors, such as small modular reactors (SMR), are designed to utilize this fuel [5] - The company is profitable and maintains a strong cash position, although its enrichment capacity is limited and it relies on foreign sources for its LEU supply [8] Market Position and Risks - Centrus is the first U.S. supplier of HALEU but faces competition from several global companies, including a Russian firm, Tenex, which has a supply contract with Centrus [7][9] - The reliance on Tenex for LEU supply introduces geopolitical risks that could impact Centrus' ability to fulfill its obligations [9]

Core Insights - Centrus Energy announced a multi-billion-dollar expansion of its Ohio facility, marking the most significant domestic uranium enrichment investment in decades, which is expected to create 1,300 jobs and increase production of Low-Enriched Uranium (LEU) and High-Assay, Low-Enriched Uranium (HALEU) [1][2][3] Group 1: Expansion Plans and Market Demand - The expansion is strategically timed as the U.S. aims for energy independence and nuclear power is experiencing a resurgence [2][3] - Centrus has secured over $2 billion in customer commitments and raised $1.2 billion in funding over the past year, indicating strong market demand for enriched uranium [3][5] - The company is the only American firm utilizing domestic technology and manufacturing for uranium enrichment, enhancing its competitive edge [2][4] Group 2: Financial Performance - In Q2 of 2025, Centrus reported revenue of $154.5 million with a gross margin of 35%, an increase from 19% in the previous year [5] - The company ended Q2 with a cash position of $833 million, providing sufficient liquidity to support its expansion plans [5] Group 3: Strategic Partnerships - Centrus has formed a memorandum of understanding with Korea Hydro & Nuclear Power (KHNP) and POSCO International, reflecting growing international confidence in its expansion plans [4] - The partnership with KHNP demonstrates real market demand for American-made enriched uranium, as Korea operates 26 reactors and is constructing four more [6] - The increased supply volume commitment under the February 2025 contract is contingent on federal funding, validating Centrus' commercial viability [6]

Core Insights - Centrus Energy (LEU) is planning to significantly expand its uranium enrichment plant in Piketon, OH to increase production of Low-Enriched Uranium (LEU) and High-Assay, Low-Enriched Uranium (HALEU) [1][8] - The expansion is contingent on securing funding from the U.S. Department of Energy (DOE), which is reviewing proposals for increasing domestic LEU and HALEU production [2][8] - Centrus has raised over $1.2 billion through convertible note offerings and secured more than $2 billion in contingent purchase commitments from utility customers [3] Expansion Plans - The expansion will involve adding thousands of additional centrifuges to enable large-scale production [2] - A Memorandum of Understanding (MOU) has been signed with Korea Hydro & Nuclear Power (KHNP) and POSCO International to attract private capital for the expansion [3][4] - The project is expected to create 1,000 construction jobs and 300 operational jobs at the Piketon site, along with supporting jobs in Tennessee and across the supply chain [5] Competitive Position - Centrus Energy is the only U.S.-based company that manufactures centrifuges and related equipment using exclusively American technology, differentiating it from foreign competitors [6] - Centrus Energy's stock has increased by 314.4% this year, outperforming the industry average growth of 14.8% [7][9] Financial Estimates - The Zacks Consensus Estimate for Centrus Energy's 2025 earnings is $4.32 per share, reflecting a 3.4% year-over-year decline, while the estimate for 2026 is $3.25, indicating a 24.7% decline [10]