Back to top

Image: Bigstock

UUUU Stock Rises on POSCO & Chemours Deals: How Should You Play It?

Read MoreHide Full Article

Energy Fuels (UUUU - Free Report) gained 3% in the past two trading sessions, fueled by its back-to-back partnership announcements with POSCO Holdings Inc. (PKX - Free Report) and Chemours (CC - Free Report) . UUUU’s collaboration with South Korea's POSCO will likely establish a supply chain for rare earth magnets essential in electric vehicles and other technologies. The Energy Fuels and Chemours partnership will ramp up domestic production of rare earth elements (REE), titanium and zirconium. 

UUUU & POSCO to Create REE Supply Chain Independent of China

Energy Fuels and POSCO announced their collaboration on March 17 to establish a competitively priced REE supply chain that is independent of China.
POSCO is a leading producer of traction motor cores, which are key components in electric vehicle (EV) and hybrid EV drivetrains. Its combination with Energy Fuels' rare earth oxide production could significantly contribute to the supply of REE materials for automakers in the United States, Europe, Japan and South Korea.

Initial samples of Energy Fuels' neodymium-praseodymium (NdPr) oxide produced at its White Mesa Mill in Utah have met POSCO’s specifications. The next phase involves Energy Fuels providing a larger sample for processing into NdPr metal, alloy and high-performance permanent REE magnets.
Following the successful validation of the samples of NdPr Oxide, Energy Fuels and POSCO will discuss the delivery of additional volumes that can potentially power more than 30,000 EVs later this year.

UUUU & Chemours to Build REE & Critical Mineral Supply Chain

Energy Fuels and Chemours on March 18 announced that they are expanding their existing 4-year association to enhance U.S. domestic rare earth and critical mineral supply chains.  This will help lower the dependence on China for the supply of critical materials. Both companies can capitalize on the surge in demand for these materials that are essential to energy, defense and advanced manufacturing. 

Energy Fuels, a leading U.S. producer of REE, is currently developing heavy mineral sand projects in Madagascar, Brazil and Australia. It is expected to produce world-scale quantities of rare earth, titanium ilmenite and zircon minerals in the coming years. Chemours mines and separates heavy mineral sands from its mines in Florida and Georgia.

UUUU Stock Underperforms Industry

Despite the recent uptick, the UUUU stock has lost 32.3% in the past year against the industry’s 8.4% decline. It has also lagged the broader Zacks Basic Materials sector’s dip of 3.4% and the S&P 500’s climb of 9.1%.

Energy Fuels Stock's 1-Year Performance

 

Zacks Investment Research Image Source: Zacks Investment Research

 

Technical indicators show that Energy Fuels has been trading below the 50-day and 200-day simple moving averages (SMAs).

UUUU Shares Trade Below 50 & 200-Day SMAs

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Is this dip in the UUUU stock a buying opportunity? Let us dig deeper.

Energy Fuels Witnesses Downward Estimate Revisions

Estimates for Energy Fuels have undergone negative revisions, as shown in the chart below.

 

Zacks Investment Research Image Source: Zacks Investment Research

 

UUUU is expected to report a loss of 14 cents per share in 2025, in contrast to the earlier-mentioned earnings of 7 cents. The estimate for the year’s revenues is pegged at $72.27 million, suggesting a 7.5% year-over-year decline.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

The estimate for 2026 revenues is pinned at $180.2 million, implying a 149% year-over-year upsurge. The consensus estimate for earnings is pegged at 6 cents. This suggests that 2026 will be the company’s first year of profit since it started trading on the NYSE in December 2013.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

UUUU’s Valuation Looks Stretched

Energy Fuels is currently trading at a forward price-to-sales multiple of 9.37, well above the industry average of 2.89. The company’s Value Score of F suggests that the stock is not so cheap and indicates a stretched valuation at this moment.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Downtrend in Uranium Prices to Weigh on UUUU

Uranium prices are currently at $64.3 per pound, the lowest in 18 months and down 27% in a year. Prices have been impacted by adequate supply amid uncertain demand.

Microsoft (MSFT - Free Report) recently canceled several data center leases, which contradicted the prevailing view that tech giants are aggressively securing new power capacity. This fueled concerns about future uranium demand.

Energy Fuels’ Long-Term Story Intact

The increasing demand for uranium and REEs in clean energy technologies, and the push for supply chains independent of China is a growth opportunity for UUUU. Considering that the White Mesa Mill in Utah is the only U.S. facility able to process monazite and produce separated REE materials, this gives the company an edge. 

Backed by its debt-free balance sheet, Energy Fuels is ramping up uranium production while developing significant REE capabilities. In sync with this strategy, the company acquired Base Resources Limited in October 2024, gaining access to the promising Toliara Mineral Sand Project. In addition to REE metals, this strengthens UUUU’s potential to become a major producer of titanium and zirconium minerals. 

Taking Energy Fuels’ current production levels and development pipeline into account, the company has the potential to produce 6 million pounds of uranium per year.

Our Final Take on UUUU Stock

Considering the premium valuation, decline in uranium prices, downward earnings revisions activity and projected loss for the current year, selling this stock would be prudent at present. The Energy Fuels stock currently carries a Zacks Rank #4 (Sell).

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


Zacks' 7 Best Strong Buy Stocks (New Research Report)


Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.


Click Here, It's Really Free

Published in