LEU Stock Falls 11% Post Q3 Earnings Miss: Time to Buy, Hold or Sell?

Core Insights - Centrus Energy (LEU) shares have declined 11% since the release of Q3 2025 results on November 5, despite reporting improvements in revenue and earnings, which fell short of analyst expectations [1][8]. Financial Performance - Centrus Energy's Q3 revenues increased by 30% year over year to $75 million, but this was below the Zacks Consensus Estimate of $80 million [10]. - The Low-Enriched Uranium (LEU) segment's revenues rose 29% to $44.8 million, driven by uranium sales of $34.1 million, compared to no uranium revenues in the same quarter last year [6][8]. - The Technical Solutions segment's revenues grew 31% to $30 million, supported by a $7.3 million contribution from the HALEU Operation Contract with the U.S. Department of Energy [10][9]. - Despite revenue growth, the company reported a total gross loss of $4.3 million, compared to a gross profit of $8.9 million in the previous year [11]. Market Position and Growth Prospects - Centrus Energy is the only licensed producer of High-Assay, Low-Enriched Uranium (HALEU) in the Western world, with significant market opportunities as the HALEU market is projected to grow from $0.26 billion in 2025 to $6.14 billion by 2035 [14][15]. - The company plans to expand its uranium enrichment plant in Piketon, Ohio, to increase production capacity for both HALEU and low-enriched uranium [16]. Valuation and Estimates - Centrus Energy's stock is trading at a forward price/sales multiple of 10.79X, significantly higher than the industry average of 3.66X, indicating a stretched valuation [21]. - The Zacks Consensus Estimate for Centrus Energy's 2025 earnings is $4.38 per share, reflecting a 2% year-over-year decline, while the estimate for 2026 suggests a more significant decline of 26.11% [17][19]. Competitive Landscape - Centrus Energy has outperformed peers in the non-ferrous mining industry, with a year-to-date stock surge of 333.9%, compared to 26% for the industry and 16.1% for the S&P 500 [2][8]. - Competitors Energy Fuels and Cameco have seen stock gains of 222.5% and 83.8%, respectively [2].