Is It Too Late To Consider Cameco After Its Huge 2025 Share Price Surge?

• If you are wondering whether Cameco is still a smart buy after its huge run, or if the easy money has already been made, you are not alone. That is exactly what we are going to unpack here.
• Despite a recent 9.5% pullback over the last week and a flat 0.3% move over the last month, Cameco is still up 55.9% year to date and 56.4% over the past year, with 3 year and 5 year gains of 291.5% and 577.8% respectively.
• These moves have come against a backdrop of growing investor focus on nuclear power as a low carbon baseload option, tight uranium supply conditions, and governments revisiting or extending nuclear programs. Together, those themes have pushed uranium prices higher and helped reframe Cameco in many investors' minds from a cyclical miner to a potential long term structural play.
• On our framework, however, Cameco only scores a 1/6 on undervaluation checks, as shown in its valuation score. We will walk through DCF, multiples, and other lenses to see if the current price makes sense, and finish by exploring a more powerful way to think about valuation than any single model on its own.

Cameco scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Cameco Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and then discounting those cash flows back to a present value. For Cameco, the 2 Stage Free Cash Flow to Equity model uses cash flow projections as its core input.

Cameco generated roughly CA$1.01 billion in free cash flow over the last twelve months, providing a strong starting base. Analysts project free cash flow to rise to about CA$1.14 billion by 2029, with further estimates beyond that point extrapolated by Simply Wall St to build a full 10 year path of cash flows. These future figures are then discounted back to today using an appropriate required return for shareholders.

On this basis, the DCF model estimates Cameco’s intrinsic value at roughly CA$50.81 per share. Compared with the current market price, this implies the stock is about 130.3% above its DCF fair value, which suggests investors are paying a substantial premium for growth, uranium prices, and sentiment.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Cameco may be overvalued by 130.3%. Discover 913 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Cameco.

Approach 2: Cameco Price vs Earnings

For profitable companies like Cameco, the price to earnings ratio is a useful way to gauge how much investors are willing to pay for each dollar of current earnings. A higher PE can be justified when a business has strong growth prospects and relatively low perceived risk, while slower growth or higher uncertainty usually call for a lower, more conservative multiple.

Cameco currently trades on a PE of about 96.9x, which is far above the Oil and Gas industry average of roughly 14.4x and also well ahead of its peer group average of around 15.6x. To go a step further, Simply Wall St calculates a proprietary Fair Ratio of 20.7x for Cameco, which estimates the PE that would be reasonable given its earnings growth outlook, profitability, size, industry and risk profile.

This Fair Ratio is more informative than simple peer or industry comparisons because it adjusts for company specific factors rather than assuming all businesses deserve the same multiple. Comparing Cameco’s actual 96.9x PE to the 20.7x Fair Ratio suggests the market is pricing in a lot more optimism than these fundamentals alone would justify.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1454 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Cameco Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework that lets you connect your view of Cameco’s story with a concrete forecast for its future revenue, earnings and margins, and then translate that into a Fair Value you can compare to today’s price on Simply Wall St’s Community page.

Instead of relying only on static models like DCF or PE, a Narrative captures your assumptions about nuclear demand, contracting, margins and risk, turns them into a dynamic financial forecast, and then updates that Fair Value automatically when new information such as news, guidance or earnings arrives.

This can make decisions more intuitive, because you can see at a glance whether your Fair Value estimate is above or below the current share price and how your Narrative frames Cameco as a potential buy, hold or sell for you.

For example, one optimistic Cameco Narrative on the platform might assume faster revenue growth, higher margins and a premium multiple that support a Fair Value near CA$150.81. A more cautious Narrative might use lower earnings, slower growth and a reduced PE to arrive closer to CA$100, showing how different yet reasonable stories can lead to very different conclusions about what the stock may be worth today.

Do you think there's more to the story for Cameco? Head over to our Community to see what others are saying!

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.

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