Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 11 Jul, 25 | LEU | Speculative Buy | USD 197.23 | USD 210.0 | USD 220.0 | 3 days | Closed |
11.50%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
Centrus Energy Corp. supplies nuclear fuel and services for the nuclear power industry in the United States, Japan, Belgium, and internationally. The company operates through two segments, Low-Enriched Uranium (LEU) and Technical Solutions. The LEU segment sells separative work units (SWU) component of LEU; SWU and natural uranium components of LEU; and natural uranium for utilities that operate nuclear power plants. The Technical Solutions segment offers technical, manufacturing, engineering, procurement, construction, and operations services to public and private sector customers, including the American Centrifuge engineering and testing activities. The company was formerly known as USEC Inc. and changed its name to Centrus Energy Corp. in September 2014. Centrus Energy Corp. was incorporated in 1998 and is headquartered in Bethesda, Maryland.
Gross Profit Margin Expansion: Gross profit rose dramatically from $4.3 million to $32.9 million, a 665% increase YoY
Revenue Growth: Total revenue increased by 67% YoY, from $43.7 million in Q1 2024 to $73.1 million in Q1 2025
Cost Increase in Technical Segment: Costs for the HALEU Operation Contract rose by $4.1 million, contributing to overall margin pressure in that segment
Technical Solutions Profit Decline: Gross profit from the Technical Solutions segment decreased by $2.1 million, or 55% YoY, despite an 8% revenue increase
Centrus Energy's growth trajectory is significantly dependent on federal funding decisions, making it vulnerable to regulatory delays and changes in government appropriations policy
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 197.23 | 178.5 | 210.0 | 220.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strong Revenue and Profit Growth in Q1 2025: Centrus Energy Corp. reported a net income of $27.2 million on revenue of $73.1 million for the first quarter ended March 31, 2025, a significant turnaround compared to a net loss of $6.1 million on revenue of $43.7 million in the same period of 2024. This marks a 67% year-over-year increase in revenue and a return to profitability, with earnings per share (basic and diluted) of $1.60. The revenue growth was driven largely by the LEU segment and favorable contract executions.
Segmental Revenue and Margin Expansion: Revenue from the Low-Enriched Uranium (LEU) segment surged to $51.3 million from $23.6 million in Q1 2024, reflecting a 117% increase, primarily due to a 46% rise in average SWU pricing and a 49% increase in volume sold. The Technical Solutions segment posted modest growth of 8%, with revenue rising to $21.8 million. Gross profit for the LEU segment soared to $31.2 million from just $0.5 million the prior year, reflecting a staggering 6,140% growth driven by improved contract mix and higher sales volumes.
Debt Reduction and Cash Position: In a notable financial milestone, Centrus fully redeemed its 8.25% Notes due 2027, retiring $74.3 million in principal along with accrued interest, and recorded a gain of $11.8 million in Q1 2025. This strategic move reduced the company’s interest burden and improved its balance sheet. The company reported a strong consolidated cash balance of $653.0 million as of March 31, 2025, providing ample liquidity to support ongoing and future operations.
Domestic Enrichment and Government Contracts: Centrus continues to operate its HALEU enrichment facility in Piketon, Ohio, under a contract with the Department of Energy (DOE). As of March 31, 2025, it had delivered approximately 670 kilograms of HALEU UF6. Multiple federal contracts support the company’s expansion, including the HALEU Deconversion, HALEU Production, and LEU Production contracts, with a maximum potential value exceeding $6.9 billion. These contracts are contingent upon future DOE task orders and available funding.
Contract Backlog and Future Revenue Visibility: The company reported a robust backlog of $3.8 billion as of March 31, 2025, extending through 2040. This includes $2.8 billion in the LEU segment and $0.9 billion in the Technical Solutions segment. Approximately $2.1 billion of the LEU backlog comprises contingent sales commitments, of which $1.7 billion are under definitive agreements and $0.4 billion are pending. The backlog ensures visibility into long-term revenue generation, although a portion is subject to funding and commercial milestones.
Regulatory Uncertainty and Cost Dynamics: While Centrus’ government-supported contracts are backed by appropriations including $700 million from the Inflation Reduction Act (IRA), Executive Order 14154 has mandated a pause on IRA fund disbursement, introducing funding uncertainty. Furthermore, the Technical Solutions segment saw a decline in gross profit, from $3.8 million to $1.7 million, mainly due to delays in HALEU Phase 2 implementation. Costs related to this contract rose, with no corresponding fee recognized yet, though recovery is anticipated once contract modifications are finalized.
Technical Commentary: LEU's stock price has established support at key levels and has been trending higher through a series of higher highs and higher lows, indicating robust buying activity and the potential for additional gains. The 14-period RSI remains above the midpoint and is trending higher, indicating ongoing bullish momentum. Moreover, the stock is trading above its 21- and 50-period Simple Moving Averages, which could serve as support levels in the near term.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Centrus Energy Corp. (NASDAQ: LEU) at its current market price of 197.23 as of July 11, 2025 (7:18 am PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Energy Industry: Uranium
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| LEU Centrus Energy |
10.11 4.32% | 244.00 | 17.25 | 19.12 | 2.42 | - | 2.33 | 12.71 |
| CCJ Cameco Corp |
1.21 1.55% | 79.12 | 125.05 | 57.80 | 6.80 | 4.81 | 9.68 | 41.12 |
| NATKY JSC National Atomic Company Kazatomprom |
- -% | 42.40 | 14.26 | 15.75 | 0.0096 | 3.56 | 0.0093 | 0.02 |
| SRUUF Sprott Physical Uranium Trust |
- -% | 16.21 | 25.19 | 13.00 | 636.01 | 1.79 | 1968.60 | -177.8571 |
| NXE NexGen Energy Ltd. |
0.03 0.36% | 6.96 | - | - | - | 7.30 | -31.2142 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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