Why Did Uranium Energy Stock Crash Today?

Key Points

• Uranium spot prices are on the rise again after a sharp turn lower in June.

• Uranium Energy stock dropped on no significant news today.

• The uranium mining stock is unprofitable and subject to sharp changes in sentiment, with or without news behind them.

• 10 stocks we like better than Uranium Energy ›

Uranium Energy (NYSEMKT: UEC) stock tumbled 10.5% through 2:20 p.m. ET Tuesday on no obvious bad news. Actually, the opposite is true: the latest news for uranium stocks (and presumably for Uranium Energy stock) looks pretty good.

According to OilPrice.com, "uranium prices and nuclear equities are surging as tight supply, underbuilt production pipelines, and policy-driven nuclear revival create a structural supply deficit." All of this means uranium prices -- and uranium stocks, too -- should be going higher.

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Uranium prices remain strong

Indeed, uranium prices already are going higher. Since hitting a recent high near $80 back in June, uranium prices per pound dropped in July, but then resumed growing. At last report, the atomic fuel's price had passed $73.

Of course, this may be part of the problem. The spot market price of mined uranium is common knowledge, as is President Trump's support for the nuclear industry in the U.S. All of this contributes to price strength in uranium. It's also helped drive up the share price of Uranium Energy stock more than 100% over the past year.

Is Uranium Energy stock a buy?

And why is this a problem?

Not to put too fine a point on it, it's a problem because Uranium Energy stock isn't currently profitable to support its higher stock price. To the contrary, losses of $0.07 per share are expected to more than double to $0.18 this year, and analysts polled by S&P Global Market Intelligence don't think Uranium Energy stock will turn profitable again before 2027 at the earliest.

Until Uranium Energy begins producing consistent profits, investors should expect its stock to remain volatile, going up or down abruptly on good and bad news -- and sometimes on no news at all.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.