LEU Should I Buy
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Centrus Energy Corp (LEU) is not a strong buy at the moment for a beginner investor with a long-term strategy. The recent financial performance, disappointing Q4 earnings, and lack of immediate positive catalysts suggest that the stock is better suited for monitoring rather than immediate investment. While the long-term prospects tied to nuclear energy expansion are promising, the current technical and sentiment indicators do not support a strong entry point.
The MACD is negative and expanding downward (-10.697), indicating bearish momentum. RSI is at 21.884, suggesting the stock is oversold but not yet showing a reversal signal. Moving averages are converging, and the stock is trading near its S2 support level of 172.227, indicating potential further downside risk.
The U.S. Department of Energy's goal to quadruple nuclear capacity by 2050 could drive long-term demand for Centrus Energy's nuclear fuel production. The $900M HALEU enrichment contract positions the company well for future growth.
Recent Q4 earnings significantly missed expectations, with a 66.85% YoY drop in net income and a 75.62% YoY drop in EPS. The stock has seen a 19.3% drop following the earnings report, indicating negative sentiment. Analysts have expressed concerns about a lack of near-term positive catalysts.
In Q4 2025, revenue increased by 4.55% YoY to $158.5M, but net income dropped by 66.85% YoY to $17.8M. EPS fell 75.62% YoY to $0.78, reflecting significant profitability challenges despite a higher gross margin of 43.53% (up 11.47% YoY).
Analyst ratings are mixed to neutral. Roth Capital raised its price target to $137 but highlighted a lack of near-term catalysts. JPMorgan lowered its price target to $242, maintaining a Neutral rating. Northland and Needham are more optimistic, with price targets of $325 and $357, respectively, citing long-term growth potential tied to DOE funding and domestic nuclear fuel demand.
