LEU Stock Down 19% in Three Months: Should You Buy the Dip?

Shares of Centrus Energy LEU have declined 19.3% in the past three months, in contrast to the Mining – Non Ferrous industry, which advanced 31.4%. Over this time period, the Zacks Basic Materials sector gained 15.2%, while the S&P 500 was down 0.6%.

Uranium peers Cameco CCJ and Energy Fuels UUUU fared better with respective gains of 31.3% and 39.4%.

LEU Stock’s 3 Month Performance vs. Industry, Sector, S&P 500 & Peers

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Centrus Energy Trades at a Premium

Centrus Energy stock currently trades at a forward price-to-sales ratio of 8.51, well above the industry’s 4.92. Its Value Score of F also indicates a stretched valuation.

Despite the premium, Centrus Energy is valued below Cameco and Energy Fuels, which are trading at a forward price-to-sales ratio of 19.98 and 29.70, respectively.

Given the stock’s recent underperformance, the key question is whether Centrus Energy’s fundamentals and long-term growth outlook justify its pricing.

LEU Reports Y/Y Decline in Q4 Margins, Tepid View for 2026

Centrus Energy reported fourth-quarter 2025 revenues of $146 million, reflecting a 4% year-over-year decline. Revenues for the Low-Enriched Uranium segment rose 2% year over year to $124 million. This was mainly led by Separative Work Units’ (SWU) revenues, which surged 128% to $111 million. However, this was offset by an 82% plunge in uranium revenues to $13.4 million in the quarter due to a substantial one-time uranium sale in the fourth quarter of 2024.

The Technical Solutions’ segment revenues declined 27% year over year to $21.8 million in the quarter.

Centrus Energy witnessed a 43% year-over-year slump in gross profit, with the cost of sales rising 24%. Gross margins contracted to 24% from 41% in the last year's quarter. Operating margin contracted to 9% from 30% in the last year's quarter. Adjusted earnings per share were 79 cents, which marked a 75% year-over-year plunge.

A shipment from Russia that was due in the fourth quarter was delayed and pushed out to the first quarter of 2026. This weighed on margins and net income in the quarter.

Centrus Energy expects revenues between $425 million and $475 million in 2026. The midpoint of the range suggests flat year-over-year results.
The company, however, exited 2025 with a robust $3.8 billion revenue backlog, including long-term utility contracts extending through 2040. The Low-Enriched Uranium segment alone accounted for roughly $2.9 billion of this backlog.

Centrus Energy’s Expansion Plans to Boost Production

In September 2025, the company announced plans to significantly expand its uranium enrichment plant in Piketon, OH, to boost the production of Low-Enriched Uranium and High-Assay, Low-Enriched Uranium (HALEU). In December, the company began domestic centrifuge manufacturing to support commercial LEU enrichment activities at the facility, reinforcing its first-mover advantage in U.S.-owned uranium enrichment.

The company aims to leverage its multi-billion-dollar expansion to address more than $2.3 billion in contingent low enriched uranium sales contracts with both domestic and international customers. It is targeting 12 metric tons of HALEU production per year sometime after 2030, with at least some HALEU production by the end of the decade.

On Jan. 5, 2026, Centrus Energy was selected by the DOE for a $900 million task order to expand its uranium enrichment facility in Piketon to enable commercial-scale production of HALEU. However, it remains subject to final negotiation.

Centrus Energy has entered into discussions with Oklo Inc. OKLO to explore a joint venture focused on deconversion services for HALEU and the advancement of related fuel-cycle technologies and supply chains. The collaboration would operate at the Piketon site, adjacent to Oklo’s planned 1.2-gigawatt nuclear power campus, potentially improving supply-chain efficiency and expanding domestic nuclear fuel capacity.

LEU’s Elevated Debt Remains a Concern

LEU had a total debt-to-total capital ratio of 0.61 as of Dec. 31, 2025. Meanwhile, Cameco has a total debt-to-total capital ratio of 0.13, while Energy Fuels boasts a debt-free balance sheet.

Centrus Energy’s Earnings Estimates Trend Downward

The Zacks Consensus Estimate for earnings per share for 2026 and 2027 has been revised downward over the past 60 days.

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The estimate for Centrus Energy’s 2026 earnings is pegged at $3.27 per share, indicating 16% year-over-year decline. The estimate for 2027 is $3.38, suggesting a modest growth of 1.84%.

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Centrus Energy Targets HALEU Market as Reactor Demand Rises

Centrus Energy provides the enrichment component of low enriched uranium, which is measured in SWUs, to utilities that operate commercial nuclear power plants. Its current facilities can process 3.5 million SWU annually, which can be scaled to 7 million SWU.

The company is the only licensed producer of HALEU in the Western world. HALEU demand is expected to surge to power existing reactors and a new generation of advanced reactors. HALEU opportunity is estimated at $8 billion per year by 2035, which provides a strategic advantage to the company.

The first new cascade is expected online in 2029, with some HALEU production planned before the decade's end and 12 MT per year shortly thereafter. This lengthy timeline is concerning.

How to Play LEU Stock?

Centrus Energy is playing a critical role in rebuilding the U.S. uranium enrichment supply chain, an area that has seen decades of underinvestment. Its large-scale enrichment expansion and HALEU strategy position the company well for long-term growth as demand for advanced reactors rises.

The company’s leadership in HALEU provides a meaningful early-mover advantage, though the benefits may take time to fully materialize. Investors holding LEU shares should continue to do so to benefit from the solid long-term fundamentals. However, new investors can wait for a better entry point, considering the premium valuation, near-term earnings pressure as well as downward estimate revisions and its elevated debt levels. Centrus Energy stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Cameco Corporation (CCJ): Free Stock Analysis Report

Energy Fuels Inc (UUUU): Free Stock Analysis Report

Centrus Energy Corp. (LEU): Free Stock Analysis Report

Oklo Inc. (OKLO): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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