Can Centrus Energy Scale Fast Enough to Meet Surging HALEU Demand?

Centrus Energy LEU has achieved a major milestone in the advancement of High-Assay, Low-Enriched Uranium (HALEU) production by successfully delivering 900 kilograms of this advanced nuclear fuel to the U.S. Department of Energy (DOE). This marks the completion of Phase II of Centrus Energy’s three-phase contract with the DOE.

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.

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 snow 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, meanwhile, plans to expand production capacity in Ohio so that it can meet the domestic demand for HALEU as well as low-enriched uranium. 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. As the only company with a Nuclear Regulatory Commission license for HALEU enrichment, Centrus Energy has a clear first-mover advantage.

The company competes with major producers of low enriched uranium, all of which are wholly or substantially owned by governments - Orano (France), Rosatom/TENEX (Russia), Urenco (the Netherlands, the United Kingdom and two German utilities) and CNEIC (China).

In the uranium mining sector, Energy Fuels UUUU is aggressively ramping up production and accelerating the development of long-term pipeline projects to establish itself as a key player in the resurgence of the U.S. nuclear energy sector. Energy Fuels’ Pinyon Plain mine’s production and drill results to date indicate that it is set to be the highest-grade uranium deposit mined in U.S. history. With its current operations and development pipeline, Energy Fuels can eventually produce up to 6 million pounds of uranium annually.

LEU’s peer, Ur Energy URG, is currently operating the Lost Creek project in south-central Wyoming, which has an annual capacity of 1.2 million pounds. Ur Energy produced 83,066 pounds of uranium in the first quarter of 2025. Ur Energy recently received final approval for the expansion of Lost Creek. The company is also expanding operations at Shirley Basin, which will transform it into a two-mine operation. Shirley Basin has a licensed annual mine capacity of 1 million pounds.

LEU’s Price Performance, Valuation & Estimates

Centrus Energy shares have gained 161% so far this year compared with the industry’s 9.8% growth.

UUUU is trading at a forward 12-month price/sales multiple of 6.57X, a significant premium to the industry’s 2.97X. It has a Value Score of F.

The Zacks Consensus Estimate for Centrus Energy’s 2025 earnings is pegged at $3.48 per share, indicating a 22.15% year-over-year decline. The same for 2026 is $2.82, indicating a decline of 18.82%. Here is how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research