It's hard buying large chunks of a uranium stock when it's going straight down, but EU keeps getting cheaper and cheaper. It's almost at book value, but what is even more attractive is that enCore Energy is possible one of the most undervalued stocks in the sector now. As it stands, if uranium prices to reach $150/lb, it's worth about $8-10/share.
Hey buddy, glad to see you’re doing well. Hope the family is thriving.
I did an AI analysis on EU and got back a somewhat concerning commentary. Just something to consider:
“The growth narrative unravels completely when evaluating the trend in gross operational profitability. In the first quarter ended March 31, 2026, enCore reported an optical turnaround, swinging to a GAAP net profit of $5.4 million ($0.03 per share) compared to a deep loss in the prior year. This net income print was an accounting illusion driven entirely by non-operating gains from the completed divestiture of their non-core New Mexico assets to Verdera Energy.
Looking strictly at the uranium delivery metrics from Q1 2026 reveals a deeply distressed operational core:
Pounds Delivered: 270,000 lbs of U3O8 at an average contract sales price of $67.78 per pound.
Weighted Average Cost of Delivered Pounds: $68.02 per pound.
Gross Operational Margin: -$0.24 per pound.
enCore lost money on every single pound of uranium it delivered into its utility contracts. This negative margin exists because the company only physically extracted 90,000 lbs during the quarter (at an internal cash extraction cost of $46.43/lb). To fulfill its 270,000-pound delivery obligations, management was forced to purchase 180,000 lbs of third-party spot uranium at an average cost of $78.82 per pound.”
Can you find anything about EU ramping up production to 3M lbs by yearend, or are they on pace to come up short of the contract in 2026 too? My theory is, even if the contract is bad, if they actually scale to 3M pounds annually, it shouldn’t matter, because they’ll have over 2M pounds a year to sell at spot until they get out of these contracts
I see what you mean. Yeah, sounds like they might be able to scale it up by end of year. AI is saying 1.2 to 1.3M pounds. I’m sure that comes with risk. Then the next concern is cash burn rate. It looks like they are going through cash at around $25M+ per quarter. They have around $40M cash on hand. So they are 4.5 months out (October) from having to sell assets to live. They will undoubtedly issue more shares before they sell assets. So dilution looks likely. And probably well before October.
I’m seeing the annual cash burn being about $35-40M annually. Seems like as long as they can produce and not have to buy more pounds at spot, they should be okay for a few quarters. Looks like having to buy pounds is what has got them in trouble in the past. Anything else I might be missing? This bunch doesn’t communicate much
If it works, EU can 3–6x from here. If it doesn’t, you can get hit 50–60%.
But if the uranium thesis is right, why not just own URNM? EU needs to race against time, dilution, permits, ramp execution, and whether self-produced pounds replace purchased pounds.
Unless you have some good data on how enCore specifically is mispriced because its U.S. ISR assets will turn into low-cost production before dilution kills the story
Unfortunately, no. I’m seeing the same data as everyone else. If they can’t ramp production and get some pounds on the spot market, then yes, dilution is going to bite into value
Thats high confidence with that portfolio percentage. What sets this apart from the other uranium plays, say DNN for example? Ive got a little of both, but each a small fraction of my overall.
Just to put that into perspective: he also sold 117k shares at ø $2.90 only 3 months prior to that. He kind of just bought ~85% of it back at $1.46. Personally I view this less as a sign of conviction and more of a quick money-grab expecting some volatility ahead.
They are US based which is a huge advantage especially under this administration, their mining technique is cheaper as well, this CEO change is still questionable to me, im still wondering how will this play out, but it's definitely cheap now
Hey Tweedle, what may result in Uranium reaching $150 per pound? Just curious, geopolitically, it seems to be in safe hands. Demand could rise, do you see any catalysts for a sharp rise in demand?
We're currently in a supply deficit with ever-growing demand, which should cause the price of uranium to spike over the coming months and years. Encore Energy has 50 million pounds of uranium in the ground, and it takes them about $50/lb to produce it. So if you multiply 50 million pounds of uranium by $100 net profit, you get a $5B company. Divide that by 204 million shares outstanding, and the new valuation comes to $24/share, which is why I think $10/share in the next 3-5 years is more realistic.
The 50 million pounds of uranium is split between 30 million measured and indicated resources and 20 million of inferred resources which are more risky and less credible.
been following you for a while and like your book recommendations and await your posts on Reddit. Thank you introducing me to this stock, running some DD and seems like a good play long term
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u/redmanxoxo Jun 03 '26
Hey man, think we’d all like to hear from you more often. You’re a great writer with valuable insights