UEC Soars 114% in the Past Three Months: How to Play the Stock?

Uranium Energy UEC has soared 113.6% in the past three months, far outpacing the Mining - Miscellaneous industry’s 5.2% growth,  the Zacks Basic Materials sector’s 3.5% gain and the S&P 500’s 5.9% climb.

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

The stock has outperformed peers like Centrus Energy LEU and Cameco CCJ but trailed Energy Fuels UUUU, as shown in the chart below.

While the stock’s rally has drawn attention, investors should take a closer look at the underlying fundamentals, growth drivers and valuation before jumping in.

UEC Posted Strong Revenue Growth in FY25 But Reported Wider Loss

The company reported fiscal 2025 revenues of $66.84 million, a substantial increase from $0.2 million in the prior fiscal year. However, this jump reflected UEC’s decision not to sell any of its purchased uranium inventory in fiscal 2024, rather than an operational or price impact. In fiscal 2024, UEC’s revenues reflected toll processing services, which have been discontinued. 

During fiscal 2025, Uranium Energy sold 810,000 pounds of uranium at an average price of around $82.50 per pound, primarily in the first half.     
UEC reported gross profit of $24.5 million in fiscal 2025 compared with $0.04 million in fiscal 2024. Operating costs surged 104% to $66 million in fiscal 2025.

This was driven by higher development spending on the Burke Hollow Project and the Christensen Ranch Mine. Production readiness expenditures related to the Christensen Ranch Mine, Irigaray Plant and Palangana Mine added to its cost burdens. General and administrative expenses were also higher, due to an increase in salaries, wages and management fees due to personnel hires and adjustments for inflation. 

Overall, the higher operating expenses led to a 20-cent per share loss for the company in fiscal 2025, wider than the loss of seven cents per share for fiscal 2024. Adjusted loss in fiscal 2025 was 17 cents compared with the loss of eight cents per share in the last fiscal.

UEC’s Revenue Trends Waver Amid Uranium Swings

Uranium prices have been under pressure earlier this year due to oversupply and uncertain demand. Uranium prices had recently surged to around $83.5 per pound, fueled by growing expectations of expanded nuclear power capacity, fresh purchases by physical uranium funds and policy initiatives. Additionally, supply constraints stemming from Cameco’s lowered 2025 guidance and Kazatomprom’s 10% output reduction have supported prices.

The company often defers sales during downturns, which can lead to uneven quarterly performance. If uranium prices soften again, UEC’s growing operating costs could further pressure its bottom line.

A Debt-Free Balance Sheet to Aid Uranium Energy’s Growth Plans

As of fiscal 2025-end, UEC held 1.36 million pounds of uranium in inventory, valued at $96.6 million at the then market prices. This excludes approximately 130,000 pounds of initial Wyoming production. The company expects its warehouse inventory to expand another 300,000 pounds through December 2025, thanks to purchase contracts priced at $37.05 per pound, in addition to new production from operations.

The company ended fiscal 2025 with $321 million in cash, inventory and equities at market prices and no debt. For comparison, Energy Fuels also maintains a debt-free balance sheet, while Cameco and Centrus Energy have debt-to-total capital ratios of 0.13 and 0.55, respectively.

UEC’s Valuation Looks Stretched

Uranium Energy is trading at a forward price/sales of 83.85X, significantly above the industry average of 1.45X. The company’s Value Score of F suggests that the stock is not so cheap and has a stretched valuation at this moment.

In contrast, Centrus Energy, Cameco and Energy Fuels trade at more modest valuations of 13.40X, 14.97X and 41.36X, respectively.

Uranium Energy Positioning Itself For Long-Term Growth

The global nuclear energy market has been gaining strength, fueled by energy security concerns and rising demand for low-carbon power solutions. It has led to renewed interest in uranium stocks. 

UEC is advancing its next generation of low-cost, in-situ recovery (ISR) mining uranium projects. The ISR mining process has an edge over conventional mining methods as it requires lower capital and operating expenditures with a shorter lead time to extraction and a reduced impact on the environment. 
Fiscal 2025 marked a significant milestone with Uranium Energy transitioning from developer to producer. It successfully restarted operations at the Christensen Ranch ISR Mine in Wyoming’s Powder River Basin with initial production at around 130,000 pounds of precipitated uranium and dried and drummed concentrate. The ramp-up phase will continue while new production areas are being constructed in 2025 and 2026. The Burke Hollow project remains on track with an expected start-up in December 2025, strengthening its production profile. 

In a strategic move, Uranium Energy also acquired Rio Tinto’s Sweetwater Complex, adding roughly 175 million pounds of historic resources and establishing its third U.S. hub-and-spoke production platform. This acquisition lifted UEC’s total licensed annual production capacity to 12.1 million pounds of uranium, the largest in the United States.

The company also launched United States Uranium Refining & Conversion Corp. to position itself as the only vertically integrated U.S. company with uranium mining, processing and planned refining and conversion capabilities.

Our Final Take on UEC Stock

While Uranium Energy has made meaningful progress transitioning into production and expanding its production capabilities, the recent stock rally appears largely fueled by sector optimism rather than immediate earnings strength. Its ambitious growth strategy, debt-free balance sheet and vertical integration are long-term positives. However, considering the company’s lofty valuation, persistent losses and revenue volatility, it seems prudent to avoid the stock for now. UEC currently carries a Zacks Rank #5 (Strong Sell).

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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