Should Investors Bet on Cameco Stock Post the Q3 Earnings Miss?

Core Insights - Cameco (CCJ) reported a 14.7% year-over-year decline in revenues for Q3 2025, while adjusted earnings per share increased by 17% to CAD 0.07, missing the Zacks Consensus Estimate by 75% [1][10]. Revenue Performance - Total revenues fell to CAD 615 million ($446 million) due to lower uranium and fuel sales [4][10]. - Uranium revenues decreased by 12.8% to CAD 523 million ($379 million), with a 16% drop in sales volume to 6.1 million pounds, partially offset by a 4% increase in the average realized price [3][4]. - Fuel services revenues dropped 24% to CAD 91 million (CAD 66 million), driven by a 46% decline in sales volume, despite a 42% increase in average realized prices [4]. Production and Costs - Uranium production increased by 2% to 4.4 million pounds, with Cigar Lake production up 47% to 2.2 million pounds, while McArthur River/Key Lake production fell 21% to 2.2 million pounds [2]. - Total cost of sales decreased by 20% to approximately CAD 385 million ($279 million), with uranium segment costs down 19% and fuel services costs down 24% [5]. Future Outlook - Cameco maintained its 2025 production guidance, expecting 9.8–10.5 million pounds from McArthur River and 9.8 million pounds from Cigar Lake, totaling 19.6-20.3 million pounds [8]. - The company revised its full-year target for uranium deliveries to 32–34 million pounds, up from 31-34 million pounds [9][11]. - Projected uranium revenues for 2025 are CAD 2.8–3.0 billion, with fuel services revenues expected at $500-$550 million [11]. Financial Position - At the end of Q3, Cameco had CAD 779 million ($565 million) in cash and cash equivalents, CAD 1 billion ($725 million) in long-term debt, and a $1 billion ($725 million) undrawn revolving credit facility [7]. Market Position and Valuation - Cameco's shares have gained 17.3% over the past three months, outperforming the industry but lagging behind peers like Energy Fuels, which gained 58.3% [18]. - The stock is trading at a forward price-to-sales ratio of 15.87, significantly higher than the industry's 1.45, indicating a stretched valuation [19]. Strategic Initiatives - The company is investing in increasing production capacity and extending the mine life at Cigar Lake to 2036, while also increasing production at McArthur River and Key Lake [22]. - Geopolitical events and rising low-carbon energy demand are expected to benefit the nuclear power industry, positioning Cameco favorably in the long term [22].