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Centrus Energy Corp (LEU)
:LEU
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Centrus Energy
(NYSE MKT:LEU)
67Neutral
Positive Factors
Government Contracts
Centrus Energy is one of six companies to receive an award from the U.S. Department of Energy for HALEU deconversion, with a potential total value of $800 million over up to 10 years.
Regulatory Advantage
The company is well-positioned within the U.S. and global nuclear supply chain, benefiting from a regulatory moat that competitively shields it.
Unique Investment Opportunity
Centrus Energy is the only public pure-play in the world addressing nuclear fuel, making it a unique investment opportunity in the nuclear sector.
Negative Factors
Earnings Volatility
Q3 results tend to be seasonally weak and past volatility following earnings reports suggests some investors may underestimate this seasonality.
Revenue Predictability
LEU's revenue remains lumpy and difficult to predict, which could cause volatility when the company reports Q3 results.
Stock Valuation
LEU is downgraded from Buy to Neutral due to its recent outperformance and a lack of near-term catalysts to drive further valuation upside.
Centrus Energy (LEU) vs. S&P 500 (SPY)
Market Cap
$1.08B
Dividend YieldN/A
Average Volume (3M)706.45K
Price to Earnings (P/E)14.6
Beta (1Y)1.67
Revenue Growth38.04%
EPS Growth-19.69%
CountryUS
Employees322
SectorEnergy
Sector Strength52
IndustryUranium
Share Statistics
EPS (TTM)4.40
Shares Outstanding16,045,916
10 Day Avg. Volume879,565
30 Day Avg. Volume706,447
Financial Highlights & Ratios
PEG Ratio0.38
Price to Book (P/B)N/A
Price to Sales (P/S)2.81
Price to Cash Flow (P/CF)5.40
P/FCF Ratio5.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$147.00Price Target Upside143.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Centrus Energy Business Overview & Revenue Model
Company DescriptionCentrus Energy Corp. is a nuclear fuel supplier based in the United States, operating primarily in the nuclear energy sector. The company is engaged in the supply of nuclear fuel and services for the global nuclear power industry, including uranium enrichment and related services. Centrus Energy focuses on providing advanced nuclear fuel technologies and solutions to meet the evolving needs of its customers in the nuclear energy market.
How the Company Makes MoneyCentrus Energy makes money through the sale of nuclear fuel and related services to commercial and governmental customers around the world. The company's primary revenue stream is derived from the enrichment of uranium, which is a critical process in the production of nuclear fuel for power generation. Centrus Energy also generates income through various contracts and partnerships, including those with the U.S. government, for the development and deployment of advanced nuclear fuel technologies. Additionally, the company may engage in research and development activities to innovate within the nuclear energy sector, potentially leading to new revenue opportunities.
Centrus Energy Financial Statement Overview
Summary
Centrus Energy's financial statements reflect a company that is growing its revenues and improving its equity position, albeit with some profitability and leverage concerns. The income statement shows solid revenue growth, but margins have slightly declined. The balance sheet indicates a better equity position but high leverage, while the cash flow statement highlights improved cash generation capabilities. Overall, the company is in a positive growth trajectory, although it needs to manage its leverage more effectively.Income Statement
Centrus Energy has demonstrated a positive revenue growth trend, with Total Revenue increasing from $320.2 million in 2023 to $442 million in 2024. The net profit margin has decreased slightly due to a reduction in net income from $84.4 million to $73.2 million, but it remains healthy. The gross profit margin has also decreased marginally from 35% to 25.2%. Despite these fluctuations, the company maintains a strong EBIT margin of 10.9%, indicating effective cost management.75
Positive
Balance Sheet
The company's balance sheet shows a high debt-to-equity ratio, which indicates a significant reliance on debt financing. However, stockholders' equity has improved from $32.3 million in 2023 to $161.4 million in 2024, reflecting a strengthened equity position. The equity ratio is relatively low, suggesting a higher proportion of total assets funded by liabilities. Overall, the balance sheet reflects improvement but still poses potential financial risks.65
Positive
Cash Flow
Centrus Energy's free cash flow improved from $7.5 million in 2023 to $32.9 million in 2024, indicating a positive trend in cash generation. The operating cash flow to net income ratio suggests that the company generates adequate cash from operations relative to its net income. However, the high financing cash flow may indicate reliance on external funding sources.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 442.00M | 320.20M | 293.80M | 298.30M | 247.20M | Gross Profit |
| 111.50M | 112.10M | 117.90M | 114.50M | 97.60M | EBIT |
| 48.00M | 52.40M | 59.70M | 135.90M | 51.00M | EBITDA |
| 86.50M | 92.90M | 76.40M | 144.70M | 60.50M | Net Income Common Stockholders |
| 73.20M | 84.40M | 52.20M | 135.30M | 54.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 671.40M | 201.20M | 179.90M | 193.80M | 152.00M | Total Assets |
| 1.09B | 796.20M | 705.50M | 572.40M | 486.30M | Total Debt |
| 544.60M | 174.50M | 150.50M | 107.90M | 114.10M | Net Debt |
| -126.80M | -26.70M | -29.40M | -85.90M | -37.90M | Total Liabilities |
| 932.00M | 763.90M | 779.60M | 714.30M | 806.90M | Stockholders Equity |
| 161.40M | 32.30M | -74.10M | -141.90M | -320.60M |
| Cash Flow | Free Cash Flow | |||
| 32.90M | 7.50M | 19.90M | 48.80M | 65.70M | Operating Cash Flow |
| 37.00M | 9.10M | 20.60M | 50.00M | 67.10M | Investing Cash Flow |
| ― | -1.60M | -700.00K | -1.20M | -1.40M | Financing Cash Flow |
| 437.10M | 13.90M | -4.30M | -9.90M | -44.40M |
Centrus Energy Technical Analysis
Negative
60.38
Price Trends
82.26
Negative
79.37
Negative
66.89
Negative
Market Momentum
-5.73
Positive
34.90
Neutral
11.93
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEU, the sentiment is Negative. The current price of 60.38 is below the 20-day moving average (MA) of 67.34, below the 50-day MA of 82.26, and below the 200-day MA of 66.89, indicating a bearish trend. The MACD of -5.73 indicates Positive momentum. The RSI at 34.90 is Neutral, neither overbought nor oversold. The STOCH value of 11.93 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEU.
Centrus Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $1.27B | 8.50 | 32.48% | 3.11% | -16.56% | -24.95% | |
70 Outperform | $1.06B | 11.52 | 8.55% | 3.26% | -12.52% | -52.79% | |
67 Neutral | $1.08B | 14.63 | 75.58% | ― | 38.04% | -19.69% | |
67 Neutral | $890.10M | 34.87 | 10.01% | ― | -9.17% | -71.36% | |
57 Neutral | $7.72B | 4.32 | -3.75% | 6.33% | -0.11% | -64.75% | |
50 Neutral | $1.89B | ― | -7.92% | ― | 12.54% | -1083.58% | |
42 Neutral | $512.29M | ― | -89.17% | ― | -2.52% | -450.75% |
* Energy Sector Average
Performance Comparison
LEU
Centrus Energy
60.38
16.97
39.09%
MRC
MRC Global
10.05
-2.03
-16.80%
NBR
Nabors Industries
27.54
-51.85
-65.31%
NRP
Natural Resource PRN
89.99
3.80
4.41%
RES
RPC
4.66
-3.01
-39.24%
UEC
Uranium Energy
4.38
-2.88
-39.67%
Centrus Energy Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -26.19% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
Centrus Energy had a strong year with significant revenue growth, multiple DOE contract wins, a strengthened financial position, and strategic investments in manufacturing capacity. However, challenges such as decreased net income, export issues with TENEX, and increased costs were noted. Overall, the positive aspects outweigh the negative, indicating a promising outlook.Highlights
Significant Revenue Growth
Centrus Energy achieved $442 million in revenue for the full year 2024, a 40% year-over-year increase, driven by growth in both uranium and SWU revenue.
DOE Contract Awards
In 2024, Centrus Energy won multiple DOE contract awards for HALEU deconversion, HALEU enrichment, and LEU production, positioning the company to benefit from over $3.4 billion in federal investments.
Strong Financial Position
The company strengthened its capital position by issuing $402.5 million of convertible senior notes and reduced pension plan obligations by approximately $280 million.
Expansion of Manufacturing Capacity
Centrus announced a $60 million investment to expand centrifuge manufacturing capacity at its Oak Ridge facility, aiming to enhance readiness for future DOE task orders.
Positive Cash Flow and Backlog Growth
The company ended 2024 with a cash balance of $671.4 million and a total backlog of $3.7 billion extending to 2040.
Lowlights
Net Income Decrease
Net income for 2024 was $73.2 million, a decrease from $84.4 million in the prior year, despite the increase in revenue.
TENEX Export Challenges
The Russian government revoked the general export license of Centrus' supplier TENEX, requiring specific licenses for each shipment, posing potential disruptions.
Increased Cost of Sales
Cost of sales in the LEU segment increased from $163.9 million in 2023 to $256 million in 2024, driven by higher average SWU and uranium costs.
Company Guidance
During the Centrus Energy fourth quarter fiscal year 2024 conference call, the company provided detailed guidance on its recent achievements and future outlook. Centrus reported a substantial 40% increase in revenue to $442 million for 2024, with a gross profit of $111.5 million. The company highlighted its growing backlog of $3.7 billion through 2040, driven by long-term contingent low-enriched uranium (LEU) sales commitments. Additionally, Centrus secured multiple Department of Energy (DOE) contracts for high-assay low-enriched uranium (HALEU) enrichment and deconversion, supported by $3.4 billion in congressional appropriations. The company also strengthened its capital position by issuing $402.5 million in convertible senior notes and initiated a $60 million investment to enhance centrifuge manufacturing. Furthermore, Centrus emphasized its strategic position as the only American company with a proven enrichment technology and discussed efforts to de-risk its supply chain in response to geopolitical challenges, including issues related to Russian supplier TENEX.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.