Should Investors Bet on Centrus Energy Stock Post Q2 Earnings Beat?

Centrus Energy LEU has gained 12% since it reported second-quarter 2025 results on Aug. 5, outperforming expectations on both top and bottom lines. While revenues and earnings declined year over year, the market responded positively to Centrus Energy's continued progress on its High-Assay, Low-Enriched Uranium (HALEU) Operation Contract with the U.S. Department of Energy (DOE), which is a key growth driver for the company.

Centrus Energy’s YTD Rally Leaves Industry & Peers Way Behind

Centrus Energy stock has surged 251.5% so far this year against the non-ferrous mining industry’s 0.9% dip. The Zacks Basic Materials sector has gained 11.7% and the S&P 500 has risen 7.7% in the same time frame.

LEU Stock’s YTD Performance vs. Industry, Sector & S&P 500

Centrus Energy has also outpaced peers Energy Fuels UUUU and Cameco CCJ, which have gained 89.7% and 48.7% respectively.

LEU Stock’s Performance Against UUUU & CCJ

Centrus Energy has been trading above the 200-day simple moving average (SMA) and the 50-day SMA, indicating a bullish trend.

LEU Stock Trades Above 50-Day & 200-Day SMAs

With Centrus Energy stock riding high, investors may rush to add it to their portfolios. However, before making a decision, it would be prudent to consider the bigger picture, the company’s financials, growth prospects and risks (if any) in investing.

Q2 Highlights: LEU Segment Lags, Technical Solutions Shine

Centrus Energy posted total revenues of $155 million, beating the Zacks Consensus Estimate of $136 million. However, this represented an 18% decline lower than the year-ago quarter’s $189 million.

Revenues for the LEU segment declined 26% year over year to $125.7 million due to the absence of uranium sales and a 27% decline in sales volumes of Separative Work Units (SWU), somewhat offset by 24% SWU higher prices.  

Technical Solutions revenues jumped 48% to $28.8 million, driven by a $9.1 million boost from the HALEU Operation Contract.

Cost of sales for SWU and uranium was down 45% while cost of sales for the Technical Solutions segment surged 61%. Gross profit increased 48% year over year to $53.9 million in the quarter, with gross margins expanding to 34.9% from 19.3% in the year-ago quarter. 

Earnings were $1.59 per share, higher than the consensus mark of 78 cents. The bottom-line figure, however, marked a 16% decline from the year-ago quarter despite higher gross profit owing to higher selling, general and administrative expenses and interest expenses. 

Centrus Energy currently has a $3.6-billion revenue backlog, which includes long-term sales contracts with major utilities through 2040.

LEU Delivers on Commitments on DOE Contract

In June, Centrus Energy achieved a major milestone in the advancement of HALEU by successfully delivering 900 kilograms of this advanced nuclear fuel to the U.S. Department of Energy (DOE). This marked the completion of Phase II of its three-phase contract with the DOE. 

Centrus Energy had signed the contract in 2022 with the DOE to pioneer production of HALEU at the Piketon, OH, facility. The company has delivered 920 kilograms in Phase I and Phase II, and has now moved into Phase III. 

On June 20, 2025, Centrus Energy secured a contract extension from the DOE authorizing an additional year of production through June 30, 2026. The contract includes provisions for up to eight additional years of production beyond that, contingent upon federal appropriations and DOE discretion.

Centrus Energy’s Long-Term Story Intact

Centrus Energy is the only source of HALEU enrichment in the Western world. HALEU is expected to be needed in the next few years to power both existing reactors and a new generation of advanced reactors to meet the world’s growing need for carbon-free electricity. Unlike low-enriched uranium, which contains uranium concentration below 5%, HALEU contains uranium enriched to between 5% and 20%. It offers advantages such as improved efficiency, extended fuel cycles and lower waste.

The market opportunity is substantial, with the HALEU market value expected to grow from $0.26 billion in 2025 to $6.2 billion by 2035. Centrus Energy is planning to expand production capacity in Ohio so that it can meet the domestic demand for HALEU as well as low-enriched uranium.

LEU’s Debt Position is Concerning Compared With Peers

LEU had a total debt-to-total capital ratio of 0.55 as of June 30, 2025, higher than Cameco’s 0.13. Meanwhile, Energy Fuels boasts a debt-free balance sheet.

Centrus Energy’s Estimates Move Up, But Suggest Y/Y Declines

Both the EPS estimates for 2025 and 2026 have been revised upward over the past 30 days. 

Despite the increase, the Zacks Consensus Estimate for Centrus Energy’s 2025 earnings, which is pegged at $3.71 per share, indicates a 17% year-over-year decline. The same for 2026 is at $3.25, suggesting a decline of 12.4%. 

Disparity Between LEU's Revenue & Earnings Growth

The charts below show the trend in Centrus Energy’s revenues and earnings over the past three years. While LEU has seen a CAGR of 22.6% in its top line, the bottom line grew at a slower pace, seeing a CAGR of 12.6%.

LEU’s Valuation Appears Stretched

LEU is trading at a forward 12-month price/sales multiple of 8.57X, a significant premium to the industry’s 2.63X. It is also higher than its three-year median of 2.24X. It has a Value Score of F.

Meanwhile, Energy Fuels is trading way higher at 22.95X, Cameco at 11.85X and Uranium Energy at 12.75X.

Our Final Take on Centrus Energy Stock

As the only company with a Nuclear Regulatory Commission license for HALEU enrichment, Centrus Energy has a clear first-mover advantage to capitalize on the expected surge in demand. 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 and the expected decline in earnings.  The company’s higher debt level than its peers is also concerning. 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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This article originally published on Zacks Investment Research (zacks.com).

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