Hook & thesis
Meta's reported interest in advanced nuclear fuel has reignited institutional and retail attention in the nuclear-supply chain. Centrus Energy (LEU) sits squarely in that chain as the U.S. supplier of low-enriched uranium (LEU) and a developer of HALEU - the higher-assay feedstock needed for many small modular reactors (SMRs) and next-generation designs. The market is pricing a sizeable growth and strategic-premium into the stock; that creates an actionable trading opportunity now that headlines and potential contract announcements are tilting near-term sentiment in Centrus' favor.
My thesis: tactically buy LEU around current levels (approximately $306 as of 01/12/2026) with a tight stop and defined profit targets. The rationale is simple: confirmed commercial interest (e.g., the Meta-related coverage) and government support for domestic HALEU supply support a near-term re-rating, while the company's large inventory and cash-flow improvement provide optionality. That said, the trade is not without execution risk - HALEU ramp and inventory-cost recognition are the variables to monitor closely.
What the company does and why investors should care
Centrus Energy sells separative work units (SWUs) and uranium for commercial nuclear power, and provides technical services to government and private customers. Its LEU business - essentially enrichment services and commercially saleable fuel - generates the bulk of revenue; the technical solutions business is smaller and lumpier.
Why it matters now: a) many SMR vendors and advanced reactor developers need HALEU, and domestic supply remains limited; b) government programs and recent policy moves have increased the probability of multi-year contract flows; and c) large tech/data-center customers contemplating on-site or nearby nuclear solutions have made the space visible to capital markets. Those three dynamics turn Centrus from a commodity-cyclical supplier into a strategic domestic supplier with potential multi-year contracted revenue.
Hard numbers that back the view
- Recent quarter (Q3 fiscal 2025, period ended 09/30/2025; filing date 11/06/2025): revenues were $74.9M while net income was $3.9M and basic EPS $0.21. Operating income was negative $16.6M for the quarter, showing that profitability is still uneven and driven by timing of pricing and costs.
- Earlier quarters were lumpy: Q2 FY2025 revenues were $154.5M with operating income $33.5M; Q1 FY2025 revenues were $73.1M with operating income $20.5M. This pattern highlights the business' episodic revenue recognition and contract timing rather than steady monthly sales.
- Balance sheet (Q3 FY2025): total assets $2.2449B, current assets $2.1646B, inventory $416.3M, long-term debt $1.1735B, and equity $363.1M. The large current-assets line and inventory reflect strategic stockpiles and prepayments - valuable if HALEU demand materializes, but a potential revaluation risk if market dynamics change.
- Cash flow (Q3 FY2025): operating cash flow was modest at $10.1M for the quarter, but the company recorded significant net cash flow from financing activities ($781.8M), implying balance-sheet moves and financing that materially altered liquidity in the period. Net cash flow tallied $787.6M for the quarter.
- Market pricing context: last trade ~ $306.14 (snapshot as of 01/12/2026). Using diluted average shares in Q3 (20,677,000), the implied market capitalization is about $6.3B (price * diluted shares) - an estimate, but useful to frame how much future growth is already priced into LEU.
Put simply: the market appears to be valuing Centrus not only on current enrichment volumes but on the expected strategic value of HALEU capability and long-term contracts. That premium can compress or expand quickly based on contract headlines and policy moves, which is why this is a tactical trade rather than a slow, buy-and-hold idea.
Valuation framing
Using the most recent quarter's diluted share count (20.677M) and the trading price ~ $306, the implied market cap is roughly $6.3B. That is large relative to book equity ($363M) and indicates investors are paying a strategic multiple for future HALEU supply and contract backlog rather than current earnings power.
On an earnings basis the company has produced positive net income in recent quarters (for example Q1 and Q2 FY2025 were profitable), but Q3 FY2025 showed an operating loss of $16.6M and only $3.9M net income (helped by a tax benefit). So current earnings are volatile - valuation is better thought of as a multiple of strategic inventory/value-in-use than as a steady EPS multiple today.
Peer-comparison is challenging because few pure-play enrichment companies trade in U.S. markets. The market is therefore pricing political- and contract-related optionality. For traders, that means headline sensitivity is high and position sizing should reflect that.
Trade plan - actionable
I recommend a tactical, event-aware long with strict risk controls:
| Action | Level |
|---|---|
| Entry | $300 - $310 (preferentially scale in if price drifts toward $300) |
| Initial stop | $270 (roughly 10-12% below entry; tighten if the position rallies) |
| Near-term target | $360 (take partial profits ~ 18-20% above entry) |
| Secondary target | $420 (swing target if contract/catalyst momentum continues; ~35-40% above entry) |
Position sizing: limit exposure to a small portion of a diversified portfolio (e.g., 2-4%) given event-driven headline risk and balance-sheet leverage. Use hard stops; volatility can be elevated on earnings or contract headlines.
Catalysts to watch (2-5)
- Commercial contract announcements - any long-term supply agreement with a tech/data-center company or an SMR vendor that specifies HALEU or multi-year SWU commitments.
- DOE or federal funding announcements that accelerate domestic HALEU production or guarantee off-take.
- Operational news about Centrus' HALEU production ramp or technical milestones - successful pilot production, licensing updates or throughput improvement.
- Macro energy headlines: nuclear-friendly policy moves or private sector commitments to build SMRs that increase forward demand visibility.
Risks & counterarguments
The trade is profitable only if execution and policy continue to tilt in Centrus' favor. Key risks:
- Execution risk on HALEU. Building reliable HALEU supply is technically complex. Delays or cost overruns would derail both revenue forecasts and investor sentiment.
- Inventory valuation and margin pressure. The company carries sizable inventory (Q3 FY2025 inventory $416.3M). If market prices move or if inventory has to be written down, the P&L could be hit hard.
- Leverage and financing risk. Long-term debt was $1.1735B as of Q3 FY2025 versus equity $363.1M. High leverage increases sensitivity to cash-flow deterioration and raises refinancing risk in adverse markets.
- Headline/deal risk. The stock is highly sensitive to high-profile deals and policy headlines (e.g., recent Meta-related coverage). That amplifies volatility and can lead to sharp two-way moves.
- Regulatory and political risk. Nuclear licensing, export controls, and government procurement decisions are all politically exposed and could change direction with administrations or regulators.
Counterargument: Critics will say the stock already discounts all of Centrus' future HALEU value - implied by a market cap near $6.3B - and that the company needs to deliver multi-year, contracted HALEU off-take to justify that valuation. If Centrus cannot convert attention into binding contracts and better operating margins, the stock could correct meaningfully. That is a valid point and precisely why this is a tactical trade with a tight stop rather than a long-term buy-and-hold recommendation.
Conclusion and what would change my mind
Stance: tactical long (swing trade) - buy in the $300-$310 area with a stop at $270, take partial profits around $360 and run a remainder to $420 if catalysts accumulate. The risk/reward favors a short-duration trade because the market is currently rewarding contract news and policy tailwinds; a disciplined stop limits the capital at risk if headlines don't lead to contracts.
What would change my view to a more permanent, buy-and-hold stance: a credible multi-year HALEU off-take agreement or a demonstrable, reproducible HALEU production capability that shows Centrus can convert inventory and technical investment into contracted, predictable cash flow. Conversely, evidence of persistent operating losses, inventory write-downs, or a failure to secure domestic off-take would make me liquidate and avoid re-entry until fundamentals improve.
Key dates to log: Q3 FY2025 filing - 11/06/2025 (recent financials); market snapshot as of 01/12/2026. Watch for near-term contract or DOE announcements in the next 1-3 months as primary triggers for the trade.
Disclosure: This is a tactical trade idea, not personalized investment advice. Manage position size and use a hard stop as outlined above.