Does Centrus Energy’s 463% Rally Signal a Sustainable Opportunity in 2025?

Thinking about Centrus Energy stock? You are definitely not alone. After all, the past year has seen a staggering rally, with the share price up 463.4% over just the last 12 months. And it is not just a recent fluke. Going back five years, Centrus has delivered a jaw-dropping 4104.4% return for long-term holders. Even in just the last month, the stock surged nearly 80%, catching the attention of both Wall Street pros and regular investors alike.

What is driving this momentum? For one, there has been renewed interest in nuclear energy as a part of the global shift toward cleaner power sources. Legislative and industry signals have refreshed the outlook for companies involved in uranium enrichment and nuclear fuel supply chains, which helps explain some of the excitement surrounding Centrus Energy’s stock price. That said, anytime a stock soars this quickly, it is natural to wonder: is it still undervalued, or are we just chasing the hype?

Here is an eye-opener. Centrus Energy currently has a valuation score of 0, meaning it does not pass any of the six checks analysts use to spot undervalued companies. This result might surprise anyone expecting a screaming buy signal after such an eye-catching run.

So, is Centrus Energy truly expensive, or is there more to the story than these traditional metrics suggest? Let us break down the classic valuation approaches, and then see if there is an even smarter way to judge what this remarkable stock is really worth.

Centrus Energy scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Centrus Energy Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's true value by projecting its future cash flows and then discounting them back to today's dollars. This aims to reflect what those anticipated streams are worth right now.

For Centrus Energy, the most recent reported Free Cash Flow (FCF) is $109.6 Million. Analyst forecasts suggest cash flow will fluctuate in coming years but ultimately grow, projecting FCF to reach $218.1 Million in 2035. Analysts provide estimates for the next five years. Further projections are extrapolated by Simply Wall St based on expected industry trends and company performance.

By running these figures through the DCF formula, the estimated fair value for Centrus Energy’s shares is $235.17. However, the model shows the stock is trading 85.4% higher than this calculated value, which means it appears sharply overvalued based on the present value of future cash flows.

Result: OVERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Centrus Energy may be overvalued by 85.4%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Centrus Energy Price vs Earnings

For profitable companies like Centrus Energy, the Price-to-Earnings (PE) ratio is a popular and practical valuation metric. It helps investors see how much they are paying for every dollar of current earnings, making it easier to judge whether the stock’s price is justified given its profitability.

A "normal" or "fair" PE ratio varies between companies and industries because it reflects expectations for future growth and perceived risks. Fast-growing, lower-risk businesses can justify higher PE ratios, while those with slower growth or higher uncertainty typically have lower multiples. Context is key, so it is crucial to compare Centrus Energy’s PE ratio against relevant benchmarks.

Currently, Centrus Energy trades on a PE ratio of 75.75x. This is substantially higher than both the industry average of 13.10x and the peer average of 15.57x. This strong premium at first glance suggests investors expect Centrus to deliver outsized growth or possess unique advantages compared to its rivals.

To get a more tailored perspective, Simply Wall St calculates a “Fair Ratio” for each company based on fundamentals such as growth, risks, profit margin, market cap, and the company’s industry specifics. Centrus Energy’s Fair Ratio is 11.83x. This approach goes far beyond basic peer or industry comparisons, offering a more nuanced view of what the stock should be worth given its individual profile.

When we line up Centrus Energy’s actual PE ratio of 75.75x against the Fair Ratio of 11.83x, the stock appears significantly overvalued on this metric as well.

Result: OVERVALUED

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

Upgrade Your Decision Making: Choose your Centrus Energy Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a new and accessible tool that lets you connect Centrus Energy’s story to its numbers.

A Narrative is a simple method for expressing your own perspective about a company’s future. You can outline your expectations for Centrus’s revenue growth, earnings potential, and profit margins, then see what fair value that story implies. Narratives make investing more personal and intuitive by linking what you believe about a company’s prospects directly to dynamic financial forecasts and a resulting share price.

On Simply Wall St’s Community page, Narratives are available to everyone and used by millions of investors to track, share, and refine their views. Rather than only relying on traditional ratios, you can now compare your fair value, based on your own convictions, against the current market price and decide if Centrus Energy is a buy or sell for you.

Plus, Narratives update automatically as new information like news and earnings arrives, helping you stay in control as the story develops. For instance, some users currently forecast a fair value for Centrus Energy as low as $108, while others see it as high as $310. This reflects just how differently investors interpret the facts and potential for this unique company.

Do you think there's more to the story for Centrus Energy? Create your own Narrative to let the Community know!

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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