Cameco Posts Q2 Earning Beat: A Compelling Reason to Buy the Stock?

Cameco CCJ reported impressive second-quarter 2025 results, with revenues climbing 47% year over year to $634 million (CAD 877 million) and adjusted earnings per share surging 410% to $0.51 (CAD 0.71). Both metrics exceeded the Zacks Consensus Estimate. In the past three months, Cameco shares have gained 49.5% compared with the industry’s 2.4% growth. Meanwhile, the broader Zacks Basic Materials sector has moved up 5.4%, while the S&P 500 has climbed 9.1%.Cameco’s 3-Month Performance vs. Industry & SectorImage Source: Zacks Investment ResearchHowever, Cameco has lagged peers like Ur Energy URG and Energy Fuels UUUU, which have gained 65.9% and 112.6%, respectively.Cameco’s 3 Month Price Performance vs. Ur Energy & Energy FuelsImage Source: Zacks Investment ResearchLet us delve deeper into the company’s second-quarter results and long-term prospects before assessing whether to buy, hold or sell the stock.Digging Deeper Into Cameco’s Q225 ResultsCameco’s uranium revenues increased 47% to $510 million (CAD 705 million). The company sold 8.7 million pounds of uranium, 40% higher than the second quarter of 2024. Despite a 17% decline in the average U.S. dollar spot price for uranium, the Canadian dollar average realized price increased 5% to CAD 81.03 per pound due to the impact of fixed price contracts.In Fuel Services, production volume moved up 10% year over year to 3.2 million kgUs and sales volume surged 52% to 4.4 million kgUs. The segment witnessed a 37% rise in revenues to $117 million (CAD 162 million), with higher volumes being offset by lower average realized prices. Total cost of sales increased 47% to around $449 million (CAD 620 million). In the uranium segment, costs climbed 45% due to an increase of 4% in the average unit cost of sales and 40% higher volume. Costs of the planned annual maintenance shutdown at the Key Lake mill during the quarter also led to the increase. In fuel services, the cost of products and services sold increased 40% due to a 52% increase in sales volume, which was partially offset by a decrease of 6% in the average unit cost of sales.Cameco’s adjusted earnings surged 410% year over year to 51 cents per share in the second quarter. This was mainly attributed to stronger equity earnings from its 49% investment in Westinghouse Electric Company. Cameco’s share in Westinghouse reported net earnings for the quarter came in at CAD 126 million against the net losses of CAD 47 million in the year-ago quarter.The improvement stems from Westinghouse’s participation in the construction project for two nuclear reactors at the Dukovany power plant in the Czech Republic.Cameco Provides Upbeat OutlookCameco expects its share of adjusted EBITDA from Westinghouse to be $525-$580 million for 2025.Cameco has delivered 15.6 million pounds of uranium so far in 2025, reaching the halfway mark of its full-year target of 31–34 million pounds. In 2024, CCJ delivered 33.6 million pounds of uranium.Cameco expects 18 million pounds of production (100% basis) at each of McArthur River/Key Lake and Cigar Lake operations in 2025. However, potential risks to this outlook include the expected timing of ground freezing and development schedules in new mining areas, access to adequate skilled labor and the timing of new equipment commissioning.For 2025, uranium revenues are forecasted at CAD 2.8–3.0 billion. The company now expects the average realized price to be higher at approximately $87.00 per pound (previously $84.00 per pound). In the fuel services segment, CCJ plans to produce between 13 million and 14 million kgU in 2025. Fuel services revenues are projected at $500-$550 million for 2025. This takes the total revenue guidance for 2025 to CAD 3.3-3.550 billion. The company had reported CAD 3.136 billion in revenues in 2024.Cameco expects significant future financial benefits for Westinghouse, as a subcontractor, over the term of the construction project and related to the provision of the fuel fabrication services for both reactors. Over the next five years, Cameco’s share of adjusted EBITDA is projected to witness a compound annual growth rate of 6-10%. This, however, excludes the $170 million boost in the second quarter of 2025.Cameco’s Debt Levels are Higher Than PeersAt the end of the second quarter, CCJ had C$716 million ($519 million) in cash and cash equivalents, and C$996 million ($722 million) in long-term debt.CCJ had a total debt to total capital ratio of 0.13% as of June 30, 2025, which is on the lower side. Meanwhile, Energy Fuels has a debt-free balance sheet while Ur Energy’s total debt-to-total capital ratio is at 0.01%.Volatility in Uranium Prices a Concern for CCJUranium prices have been under pressure earlier this year due to oversupply and uncertain demand. Uranium futures have fallen to $71.5 per pound as a pause in fresh buying by holding funds allowed utilities to set lower bids. Prices have moved down 11.4% in a year.Prices have lost steam since hitting a seven-month high of $79 on June 27, driven by the news that the Sprott Physical Uranium Trust plans to purchase $200 million worth of physical uranium. The U.S. government’s initiative to quadruple domestic nuclear energy capacity by 2050, along with rising energy needs from AI data centers, had also lifted sentiment.CCJ’s Earnings Revision Activity MixedThe Zacks Consensus Estimate for Cameco’s earnings for fiscal 2025 has moved north over the past 60 days, while the same for 2026 has moved south, as shown in the chart below.Image Source: Zacks Investment ResearchThe consensus estimate for Cameco’s earnings for fiscal 2025 indicates year-over-year growth of 149%. The same for 2026 implies growth of 28.5%.Image Source: Zacks Investment ResearchCameco’s Valuation Looks StretchedCCJ stock is trading at a forward price-to-sales ratio of 13.06 compared with the industry’s 1.15. It is above its five-year median of 6.63.CCJ’s Value Score of F suggests that the stock is not so cheap and a stretched valuation at this moment.Image Source: Zacks Investment ResearchEnergy Fuels is trading higher at 22.78 while Ur Energy is a cheaper option, trading at 4.62.CCJ to Ride on Global Focus on Nuclear EnergyCCJ continues to invest in increasing production and capitalize on market opportunities. Work is underway to extend the mine life at Cigar Lake to 2036. Cameco is also increasing production at McArthur River and Key Lake from 18 million pounds to its licensed annual capacity of 25 million pounds (100% basis).Geopolitical events, energy security concerns and the global focus on the climate crisis amid rising low-carbon energy demand have created tailwinds for the nuclear power industry. Given Cameco’s low-cost and high-grade assets and diversified portfolio spanning the nuclear fuel cycle, it is well-poised to capitalize on these trends.Should You Buy Cameco Stock Now?Supported by a strong balance sheet, the company is making investments to boost its capacity to capitalize on the expected surge in uranium demand. However, new investors can wait for a better entry point, considering the premium valuation and the current volatility in uranium prices. The stock currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 Cameco Corporation (CCJ): Free Stock Analysis Report Ur Energy Inc (URG): Free Stock Analysis Report Energy Fuels Inc (UUUU): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks