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UUUU Stock Trades at Premium Value: Should You Buy, Sell or Hold?
UUUUEnergy Fuels(UUUU) ZACKS·2024-12-30 21:00

Company Overview - Energy Fuels (UUUU) is focused on boosting uranium capacity and advancing rare earth elements (REE) production [1][18] - The company has a debt-free balance sheet with 183.2millioninworkingcapital,including183.2 million in working capital, including 47.46 million in cash and 101.15millioninmarketablesecurities[34]−UUUUhasfourlong−termcontractswithmajorU.S.nuclearutilitiesfor2.8millionpoundsofuraniumdeliveriesfrom2025to2030[14]FinancialPerformance−UUUUistradingataforwardprice−to−salesratioof6.83,significantlyhigherthanthenon−ferrousminingindustry′s2.63[4]−Thestockhasdeclined28.3101.15 million in marketable securities [34] - UUUU has four long-term contracts with major U.S. nuclear utilities for 2.8 million pounds of uranium deliveries from 2025 to 2030 [14] Financial Performance - UUUU is trading at a forward price-to-sales ratio of 6.83, significantly higher than the non-ferrous mining industry's 2.63 [4] - The stock has declined 28.3% year-to-date, underperforming the industry's 0.5% dip and the S&P 500's 26.2% gain [28] - Earnings estimates for 2024 are pegged at a loss of 10 cents, improving from the 2023 loss of 12 cents, with a projected profit of 7 cents in 2025 [15][21] Market and Industry Trends - Uranium prices have declined 22.7% year-to-date, hovering around 70 per pound due to expectations of increased supply [8] - Peers Cameco (CCJ), Uranium Energy (UEC), and Centrus Energy (LEU) have gained 20.1%, 7.8%, and 27.6% respectively [3] - The Zacks Basic Materials sector has slipped 11.8% year-to-date [28] Strategic Initiatives - UUUU acquired Base Resources Limited, gaining access to the Toliara Mineral Sand Project to boost REE, titanium, and zirconium production [18] - The company is preparing two additional mines in Colorado and Wyoming, aiming to increase uranium production to over two million pounds per year by 2026 [27] - UUUU acquired RadTran LLC to recover isotopes (Ra-226 and Ra-228) for targeted alpha therapy in cancer treatment [42] Operational Challenges - UUUU paused ore shipments from its Pinyon mine due to concerns raised by the Navajo Nation, reducing 2024 uranium production estimates to 150,000-200,000 pounds [36][41] - The company expects a full-year loss in 2024 due to lower sales amid weak uranium prices [15] Analyst Outlook - The average analyst price target for UUUU is $8.75 per share, suggesting a 68.3% upside from the current price [22] - The Zacks Consensus Estimate for 2024 earnings has seen upward revisions, while the 2025 estimate has moved downward [38]