Cameco CCJ shares have declined 20.9% year to date compared with the industry’s return of 2.8% and the Zacks Basic Materials sector’s growth of  4.5%. Meanwhile, the S&P 500 has fallen 4.9%.

Cameco’s YTD Price Performance

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The Cameco stock’s decline aligns with the 29% decrease in uranium prices seen over the past year, which includes a 12% drop so far this year. Ongoing concerns at Inkai, CCJ’s joint venture in Kazakhstan have also weighed on the stock’s performance.

Meanwhile, peer Centrus Energy LEU has gained 11% so far this year.

The CCJ stock is currently below its 50-day and 200-day moving averages. Following a death crossover on March 4, 2025, the 50-day SMA continues to read lower than the 200-day SMA, indicating a bearish trend.

CCJ Shares Trade Below 50-Day & 200-Day SMAs

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Given the significant pullback in Cameco shares, investors might be tempted to grab the stock. But is this the right time? Let us understand the company’s strengths and weaknesses to better analyze how to play the stock.

Cameco Witnesses 24% Y/Y Decline in FY24 Earnings

CCJ’s revenues for 2024 rose 21% year over year to $2.2 billion (CAD $3.14 billion) on the back of higher sales volumes and an improvement in average realized prices.

In the uranium segment, sales volume grew 5% and prices rallied 17%, leading to a 24% increase in full-year revenues. In Fuel services, revenues moved up 8% year over year, aided by a 1% rise in the sales volume and 6% higher prices for the year. While the uranium segment reported a 41% increase in adjusted EBITDA, the fuel services segment witnessed a 12% decline.

CCJ registered adjusted earnings per share of 47 cents (CAD 0.67), which moved down 24% year over year but surpassed the consensus estimate of 42 cents. The decline was attributed to the impacts of purchase accounting related to the Westinghouse acquisition.

Cameco plans to ramp up its tier-one assets, and continue to optimize performance and reliability. The company intends to produce 18 million pounds of uranium (100% basis) at each of McArthur River/Key Lake and Cigar Lake in 2025. CCJ plans to produce between 13 million and 14 million kgU in its fuel services segment in 2025. 

CCJ projects uranium deliveries at 31-34 million pounds for 2025. The deliveries will be mostly weighted toward the second half. The company guides 2025 revenues at $3.3-$3.55 billion. Its share of Westinghouse’s 2025 adjusted EBITDA is expected between $355 million and $405 million.

Inkai Creates Challenges for CCJ

Cameco’s share of production was 23.4 million pounds in 2024, slightly higher than its expectation of 23.1 million pounds, attributed to record production from the Key Lake mill. 

However, production from the joint venture Inkai (on a 100% basis) was 7.8 million pounds (of which Cameco’s share was 3.6 million pounds), 0.6 million pounds lower than in 2023 due to the ongoing supply-chain issues in Kazakhstan. 

Production at Inkai was temporarily paused on Jan. 1 due to the delayed submission of certain regulatory documents to Kazakhstan’s Ministry of Energy. Even though production resumed on Jan. 23, CCJ stated that production plans for 2025 and subsequent years remain uncertain.

Also, Kazakhstan changed the Mineral Extraction Tax (MET) for uranium, effective 2025. Per the new code, the MET rate will increase from 6% to 9% in 2025. From 2026 onward, the tax will be based on production and spot prices.

Cameco’s Earnings Estimate Revision Activity Mixed

The Zacks Consensus Estimate for Cameco’s earnings for 2025 has moved south over the past 60 days. However, the same for fiscal 2026 has moved up. This is shown in the chart below.

Image Source: Zacks Investment Research

Uranium Price Decline is Concerning for CCJ

As mentioned earlier, uranium prices have been on a downtrend and are currently at $65.40 per pound. The decline comes amid a landscape of adequate supply and uncertain demand.

Recent reports indicate that Microsoft MSFT has canceled several data center leases in the United States, contradicting the prevailing view that tech giants are aggressively securing new power capacity. This development has raised concerns about future uranium demand.

Cameco Offers Lofty Stock Valuation

The CCJ stock is trading at a forward price-to-sales ratio of 6.84 compared with the industry’s 1.08. It is above its five-year median of 6.05.

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The company’s Value Score of F suggests that the stock is not so cheap and indicates a stretched valuation at this moment.

CCJ’s Long-Term Story Intact

Cameco plans to maintain the financial strength and flexibility necessary to boost production and capitalize on market opportunities. Work is underway to extend the mine life at Cigar Lake to 2036. CCJ 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.

Our Final Take on Cameco Stock

Supported by a strong balance sheet, the company is making investments to boost its capacity to capitalize on the expected surge in uranium demand. Considering the ongoing challenges at Inkai, the impacts of the new MET imposed by the Kazakhstan government and CCJ’s premium valuation, selling this stock would be a prudent move at present. The stock currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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