Event context and recent stock performance

Centrus Energy (LEU) has caught investor attention after a recent move in its share price, with the stock closing at $315.92 and showing a 4.6% decline over the past day.

That short term pullback comes after gains of 5.9% over the past week and about 21% over the past month, while the past 3 months show a relatively flat total return near 0.3%.

Looking beyond the latest pullback, Centrus Energy’s 1 year total shareholder return is very large at 256.85%, while the year to date share price return of 15.93% suggests momentum has been building rather than fading.

If Centrus has put nuclear fuel back on your radar, it could be a good moment to broaden your research with aerospace and defense stocks as another source of potential ideas.

After a run that has seen very large multi year returns and a recent pullback from $315.92, the key question now is simple: is Centrus Energy still undervalued, or is the market already pricing in future growth?

Most Popular Narrative: 12.9% Overvalued

With Centrus Energy last closing at $315.92 against a narrative fair value of $279.73, the market price sits above that widely followed estimate, which is built on specific assumptions about growth, margins, and discounting at 6.956%.

The analysts have a consensus price target of $229.3 for Centrus Energy based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $310.0, and the most bearish reporting a price target of just $108.0.

Curious what kind of revenue path, margin reset, and earnings multiple are being used to support that fair value gap and long term thesis tension? The full narrative lays out one clear growth arc, a very specific profit profile, and a future valuation multiple that looks more like a high growth story than a mature utility supplier. If you want to see exactly which assumptions carry the most weight in that model, follow through and read the rest.

Result: Fair Value of $279.73 (OVERVALUED)

However, several things could still flip that story, including slower than expected utility contracting, or delays and cost overruns tied to Department of Energy funding decisions.

Build Your Own Centrus Energy Narrative

If you look at the numbers and come to a different conclusion, or simply prefer to test your own assumptions against the data, you can build a complete Centrus view from scratch in just a few minutes with Do it your way.

A great starting point for your Centrus Energy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If you stop with just one stock, you could miss opportunities that better fit your goals, so keep widening your search and let the data do the heavy lifting.

• Spot potential bargains early by scanning these 870 undervalued stocks based on cash flows, which is built around companies where cash flow expectations and price are pointing in different directions.
• Back big themes in technology by checking out these 24 AI penny stocks, focused on businesses tied to artificial intelligence trends.
• Hunt for growth off the beaten path with these 3531 penny stocks with strong financials, which already includes companies that show stronger financials than many investors expect at lower share prices.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.