Centrus Energy Soars 197% YTD: Buy, Sell or Hold the Stock?

Core Viewpoint - Centrus Energy (LEU) has experienced a significant stock surge of 196.5% year-to-date, outperforming the non-ferrous mining industry and the S&P 500 [1][6]. Group 1: Stock Performance - Centrus Energy's stock has outperformed peers such as Cameco (CCJ) with a gain of 37.8%, Energy Fuels (UUUU) with 26.9%, and Uranium Energy (UEC) which has seen a decline of 6.3% year-to-date [4][6]. - The company has been trading above both the 200-day and 50-day simple moving averages, indicating a bullish trend [7]. Group 2: Business Developments - Centrus Energy completed Phase II of its Department of Energy (DOE) HALEU contract, delivering 900 kilograms of High-Assay, Low-Enriched Uranium (HALEU) and securing a one-year extension through June 2026 [11][12]. - The company reported Q1 revenues of $73.1 million, a 67% increase year-over-year, with LEU segment sales rising 117% due to higher prices and volume [15][16]. - Centrus Energy has a robust backlog of $3.8 billion in revenue, including long-term contracts with major utilities extending through 2040 [16]. Group 3: Market Opportunity - Centrus Energy is the only source of HALEU enrichment in the Western world, with the HALEU market expected to grow from $0.26 billion in 2025 to $6.2 billion by 2035 [17][18]. - The company plans to expand production capacity in Ohio to meet domestic demand for HALEU and low-enriched uranium [18]. Group 4: Financial Metrics - Centrus Energy's total debt-to-total capital ratio stands at 0.68, which is significantly higher than Cameco's 0.13, while Energy Fuels and Uranium Energy have no debt [19]. - The company has experienced a compound annual growth rate (CAGR) of 22.6% in revenues, but earnings growth has lagged at a CAGR of 12.6% [20]. Group 5: Valuation and Earnings Estimates - Centrus Energy is trading at a forward price/sales multiple of 7.46X, which is a premium compared to the industry average of 2.91X and its three-year median of 2.18X [27]. - The Zacks Consensus Estimate for Centrus Energy's 2025 earnings is $3.43 per share, indicating a 23.3% year-over-year decline, with a similar decline projected for 2026 [24][25].