Energy Fuels Inc. UUUU is expected to register higher revenues and break-even earnings when it reports fourth-quarter 2024 results later this month.
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for Energy Fuels’ fourth quarter is pegged at break-even earnings, suggesting an improvement from the loss of 13 cents per share reported in the fourth quarter of 2023. The estimate has been unchanged over the past 60 days.
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The consensus estimate for UUUU’s revenues is $45.25 million, indicating a significant jump from the year-ago quarter's reported figure of $0.47 million.
Energy Fuels’ Earnings Surprise History
UUUU’s earnings beat the Zacks Consensus Estimates in two of the trailing four quarters while missing in the other two. The company has a trailing four-quarter negative earnings surprise of 85%, on average. The trend is shown in the chart below.
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What the Zacks Model Unveils for UUUU Stock
Our proven model does not conclusively predict an earnings beat for Energy Fuels this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: UUUU has an Earnings ESP of 0.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Have Shaped Energy Fuels’ Q4 Performance
UUUU had paused ore shipments from its Pinyon mine in Arizona following concerns raised by the Navajo Nation about transporting radioactive materials through their lands. Yet, mining continued at Pinyon, with the mined ore stockpiled at the site. Factoring in this setback, Energy Fuels anticipated to produce 150,000-200,000 pounds of finished uranium in 2024, lower than the prior stated 150,000-500,000 pounds.
Recently, UUUU, Navajo Nation Department of Justice and Navajo Nation Environmental Protection Agency signed a landmark agreement, and ore transport is expected to resume in February.
At the beginning of the fourth quarter, the company’s inventory included 235,000 pounds of finished uranium, as well as 805,000 pounds of uranium in ore, raw materials and in work-in-progress. Energy Fuels also held 905,000 pounds of finished vanadium, 38 tons of finished separated neodymium praseodymium and 9 tons of finished high purity, partially separated mixed rare earth carbonate in inventory.
Energy Fuels sold 200,000 pounds of uranium in the first quarter of 2024 under long-term contracts for $75.13 per pound. With no contract sales scheduled for the fourth quarter of 2024, the company is likely to have sold part of its inventory at the spot market during the quarter. Notably, in the first three quarters of 2024, Energy Fuels sold 250,000 pounds of uranium on the spot market for $91.51 per pound. The major part of the sale was done in the first quarter to capitalize on higher prices.
We expect Energy Fuels’ 2024 uranium sales to be lower than the substantial sale of 560,000 pounds in 2023. This suggests a maximum sale of 1,10,000 ounces of uranium sales for the fourth quarter of 2024. However, uranium spot prices averaged $76.75 per pound for the fourth quarter of 2024, declining 7% year over year. This is expected to get reflected in UUUU’s fourth-quarter 2024 revenues.
Selling, general and administrative expenses are expected to have risen due to increased salaries and benefits related to the additional headcount associated with the business enhancement efforts.
UUUU’s Price Performance & Valuation
Shares of Energy Fuels have lost 23.2% in the past year against the industry's 10.6% growth. In comparison, the Zacks Basic Materials sector and the S&P 500 have risen 0.7% and 23.2%, respectively, in the same period.
Energy Fuels’ Price Performance Against Industry & Broader Market
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The UUUU stock is currently trading at a forward sales multiple of 5.98, well above the industry average of 2.80.
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The company is, however, cheaper than peers Cameco CCJ and Uranium Energy UEC, which are trading at price-to-sales ratios of 8.37 and 21.34, respectively.
Investment Thesis on UUUU
Backed by its debt-free balance sheet, Energy Fuels is ramping up uranium production while advancing rare earth element (REE) capabilities to capitalize on the surge in demand for both in clean energy technologies. The recent acquisition of Base Resources Limited supports its target to become a leading global producer of REEs. Energy Fuels’ industry-leading mineral resources and a pipeline of high-quality, large-scale development and exploration projects provide a competitive edge.
By acquiring RadTran LLC, the company recently made its foray into the medical isotope market. These play crucial roles in cancer treatment, and there is a global scarcity of these isotopes. Using RadTran’s know-how, UUUU will recover valuable isotopes from its process streams, recycling the material that would otherwise have been lost to disposal, which is laudable.
Should You Buy Energy Fuels’ Stock Now?
The impacts of expected uranium sales are likely to get reflected on the company’s top line in the to-be-reported quarter. Even though uranium prices have declined so far this year, we believe that this is temporary as supply pressure and solid demand fundamentals point to higher sustained uranium prices in the future. Energy Fuels is investing to boost its capacity to meet the increased demand for uranium and REEs on clean energy trends.
Despite its expensive valuation, UUUU is a great stock to own, which will help investors benefit from the solid long-term fundamentals of the uranium markets.
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