Will Energy Fuels' Cost Strategy Boost Its Margins in 2026?

Energy Fuels Inc. UUUU is advancing its strategy to establish itself as one of the lowest-cost uranium producers globally. The company has begun processing low-cost, high-grade ores from its Pinyon Plain mine, starting in the fourth quarter of 2025 through the first quarter of 2026. Over this period, it expects to produce 1.1-1.4 million pounds of finished uranium. Average mining and transportation costs to the White Mesa Mill are estimated at $10-$14 per pound of recovered uranium and milling costs are projected at $13-$16 per pound. This takes the weighted average cost of goods sold to $23-$30 per pound of uranium recovered, positioning Energy Fuels among the lowest-cost uranium producers worldwide.The high-grade Pinyon Plain ores will be blended and processed with the lower-grade, higher-cost ores from La Sal or Pandora through early 2026. Subsequently, Energy Fuels will have the choice to process Pinyon Plain ores alone to maximize margins or continue to blend with other sources. As of Sept. 30, 2025, Energy Fuels’ finished uranium inventories carried a weighted average cost of $53 per pound, reflecting the weighted average cost of production and purchase of finished inventories from various sources over the years. As lower-cost Pinyon Plain output is integrated, the cost of goods sold for uranium sales is projected to fall to $50–$55 per pound through late 2025 and fall further to $30–$40 per pound in the first quarter of 2026. This steady reduction in costs, coupled with stable uranium prices, is expected to significantly boost Energy Fuels’ gross margins, reinforcing its competitive advantage in the North American market.This expected cost inflection is particularly important given the margin compression Energy Fuels experienced in the last reported quarter. The company had reported a gross margin of 28% in the third quarter of 2025, which marked a contraction from 54% in the year-ago quarter. A 338% surge in revenues was offset by a 592% increase in cost of sales due to an increase in uranium volumes sold at a higher cost per pound of uranium. Peer Cameco Corp.’s CCJ gross margin was 28% in the third quarter, higher than 24% in the year-ago quarter. While Cameco’s revenues dipped 15% in the quarter, a 19% decline in cost of sales led to the gross margin expansion for Cameco in the quarter. Meanwhile, peer Centrus Energy LEU reported a gross margin of negative 6% in contrast to the gross margin of 15% in the year-ago quarter. A 30% increase in revenues was offset by a 62% increase in cost of sales. This was due to higher volumes in the Low-Enriched Uranium segment and an increase in costs incurred under the HALEU Operation Contract in the Technical Solutions segment.UUUU’s Price Performance, Valuation & EstimatesEnergy Fuels shares have gained 184.1% so far this year compared with the industry’s 38.3% growth. Image Source: Zacks Investment ResearchUUUU is trading at a forward 12-month price/sales multiple of 40.53X, a significant premium to the industry’s 3.97X. Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Energy Fuels’ 2025 loss is pegged at 35 cents per share. The bottom-line estimate for 2026 is pegged at a loss of six cents per share. Here is how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.Image Source: Zacks Investment ResearchThe company currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.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 Cameco Corporation (CCJ): Free Stock Analysis Report Energy Fuels Inc (UUUU): Free Stock Analysis Report Centrus Energy Corp. (LEU): 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