Centrus Energy: Betting on America’s Nuclear Comeback
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Summary
Centrus Energy (LEU) is not a household name, but it sits in the middle of one of the most important energy shifts of our time.
As the U.S. and the world grapple with energy security, climate change, and soaring electricity demand from AI data centers, nuclear power is back in the spotlight. And Centrus happens to be the only U.S.-listed company capable of producing enriched uranium at commercial scale.
That unique position makes LEU more than just another small-cap energy stock, it’s a strategic bet on America’s nuclear future.
For investors who can stomach volatility, Centrus offers asymmetric upside if policy momentum and market demand align.
But first, a little bit about me, The Pragmatic Investor
I call myself The Pragmatic Investor because my approach is built on one thing: what works in practice.
Markets are noisy, strategies are endless, and theories are only as good as their results. Over years of research and investing, I’ve distilled my philosophy into what I call the Pragmatic Investing Pyramid — a three-pronged framework of Macro, Fundamentals, and Technicals.
Macro gives the big picture: cycles, policy, and geopolitics that drive long-term wealth.
Fundamentals keep us grounded in the reality of business models and balance sheets.
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What Does Centrus Do?
At its core, Centrus enriches uranium, the essential fuel for nuclear reactors. Raw uranium (U-238) needs to be processed into U-235 to power reactors. Most nuclear plants use low-enriched uranium (LEU), a mix containing 3–5% U-235. Advanced next-generation reactors will require HALEU (high-assay low-enriched uranium), enriched to 5–20%.
Here’s why Centrus matters:
Global Concentration: Today, four foreign players dominate over 95% of the global enriched uranium market—Russia’s Rosatom, France’s Orano, the U.K.-Dutch-German consortium Urenco, and China’s CNEIC. The U.S. has no other domestic supplier.
Centrus’ Lead: Centrus operates the only NRC-licensed facility for HALEU production in the U.S. Its Piketon, Ohio, plant has already successfully produced HALEU, proving the technology works.
Strategic Necessity: With Russia exiting the U.S. market by the end of the decade, utilities will need alternative supply. Centrus is preparing to fill that gap.
In short, Centrus is America’s foothold in a market dominated by state-backed foreign entities. That alone creates a strategic moat.
A Market Tailwind: Nuclear’s Comeback
The macro backdrop is increasingly supportive:
Policy Push: In May 2025, President Trump issued executive orders calling for a “nuclear renaissance,” including faster licensing timelines, building reactors on federal land, and a mandate to mine and enrich uranium domestically. While politics in Washington are often divided, nuclear energy enjoys rare bipartisan support. A Pew survey showed nearly half of Democrats and a majority of Republicans support expanding nuclear energy.
Utility Demand: U.S. plans call for nuclear capacity to quadruple by 2050. States like New York, Texas, and Wisconsin are already funding new reactors. Utilities will need long-term contracts to secure fuel. This is a worldwide trend.
Private Sector Demand: Big Tech—Amazon, Microsoft, and Meta—are signing long-term nuclear contracts to power data centers. With AI demand driving electricity needs up, nuclear’s reliability is more appealing than ever.
This wave creates the backdrop for Centrus to grow from a niche player to a central supplier in the western nuclear ecosystem.
Financial Foundation
Centrus’ balance sheet shows the company has prepared for this moment:
Backlog: $3.6–3.8 billion in contracts stretching to 2040, offering long-term revenue visibility. Roughly $1.8 billion of that is binding.
Cash: $833 million on hand as of Q2 2025, giving Centrus flexibility to self-finance projects if government funds are delayed.
Profitability: Despite volatile revenue, Centrus has remained profitable thanks to higher margins. In Q2 2025, gross margin expanded to 35% (from 19% a year earlier), even though revenue fell due to delivery timing.
Debt: The company raised capital through convertible notes, but with strong cash and interest income, it remains well-positioned to manage obligations.
For a company once emerging from bankruptcy, today’s Centrus is financially stable and strategically focused.
Strategic Initiatives
Centrus is not waiting passively for Washington. It is actively preparing to seize the nuclear opportunity:
Supply Chain Investments: $60 million invested in production readiness to shorten lead times and expand capacity when demand accelerates.
DOE Partnership: An extended contract with the Department of Energy to produce HALEU until 2026, with an option to extend eight more years. Nearly one ton has already been delivered, proving capability.
Backlog Growth: New contingent sales agreements linked to its Piketon facility show utilities are lining up for future supply once large-scale capacity comes online.
CEO Amir Vexler emphasizes that Centrus’ advantage isn’t technology—centrifuge enrichment is proven—but execution and readiness. Each new centrifuge set requires 3–4 years to build, so positioning now is critical.
Why the Stock is So Volatile
LEU has been on a wild ride. Over the last 52 weeks, the stock rallied more than 350%, hitting 12-year highs before falling 25% in a sharp correction.
The drop was driven by profit-taking, concerns over tariffs, and a convertible debt issue—not by fundamental collapse.
For investors, this volatility is the price of admission. LEU isn’t a slow-and-steady utility; it’s a leveraged play on policy shifts and nuclear demand. The reward, if the thesis plays out, could be outsized.
Risks in a Nutshell
Centrus has a strong setup, but risks are real:
Policy Dependence: Growth depends on DOE contracts and federal support. Delays in funding or regulatory bottlenecks could slow progress.
Construction Timelines: Building centrifuge capacity is slow (3–4 years), creating risk if demand spikes faster than Centrus can deliver.
Market Competition: While Centrus has a unique U.S. position, foreign suppliers and new technologies (like laser enrichment) could challenge long-term share.
Revenue Volatility: Quarterly results swing widely depending on contract delivery timing, frustrating short-term investors.
Commodity Prices: Uranium price swings add another layer of uncertainty.
Investors must view LEU as a long-term strategic bet, not a smooth compounder.
The Bullish Thesis
Why buy Centrus now? Three core reasons:
Unique Positioning: Centrus is the only commercial U.S. supplier of enriched uranium. With Russia exiting, the U.S. and allies will lean on Centrus for secure supply.
Policy Tailwinds: Bipartisan support and Trump’s nuclear push could accelerate timelines, making Centrus the direct beneficiary of government and utility demand.
Financial Strength: A multibillion-dollar backlog and $833 million in cash give Centrus staying power to weather delays and capture long-term contracts.
If Centrus successfully scales HALEU production and expands its Piketon facility, it could evolve into a monopoly-like supplier in the western market. That potential justifies the stock’s premium and volatility.
Conclusion
Centrus Energy is not your typical energy stock. It’s a strategic linchpin in America’s nuclear revival, with the technology, licenses, and partnerships to dominate a critical piece of the supply chain. Yes, the risks are significant—policy delays, construction lags, and quarterly swings will test investors’ patience. But for those willing to look three to five years out, Centrus offers something rare: exposure to a once-in-a-generation shift in how the U.S. powers itself.
For investors who believe nuclear is coming back, Centrus may be the purest way to play that theme.
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