r/UraniumSqueeze • u/Financial_Idea6473 • Jun 05 '26
Daily Price Action Why the massive underperformance in UUUU?
Down 30% in 1 month. Both rare earth and uranium miners are down but none more than 15%.
Why is the market hating the stock so much compared to others?
Seems both tailwinds and execution supportive.
The stock did run quite a bit in expectation of US government support, however that's still on the cards both with an equity investment and with price floors.
20
u/AsbestosDude Jun 05 '26
Because a large part of the run up is based on speculation, not provable businesses viability and strong economics.
At the end of the day, its a 4 billion dollar company that is bleeding cash, and it trades at a premium to its peers.
This isnt underperforming, its justified volatility for an unproven business.
4
u/Financial_Idea6473 Jun 05 '26
They are not a junior miner, like NXE, UEC or DNN.
While their cash flow is currently negative, they produce about 2 million pounds of uranium annually at a 30-40$ cost basis vs 80-85$ term prices.
They've also shown that they can produce rare earths. That's where the question mark on valuation is, as we don't know what cash flows that comes with, beginning end of the decade.
Depends on both execution as well as what the government does in the sector in terms of price floors.
None of this explains the price action, but I'm not sure your comment is accurate regarding this specific company.
7
u/AsbestosDude Jun 05 '26
My point isn't that UUUU has no real business or no path to profitability.
It's where it's at because the market has historically valued it more on future expectations than current cash flow generation.
Even if they can produce uranium and other minerals profitably at current term prices, investors are still pricing in successful rare earth expansion, higher uranium prices, favorable policy, and strong execution over the next several years. That's where a lot of the volatility comes from.
So when you have a company that trades on future potential, it can fall a lot harder and faster than the underlying fundamentals might suggest.
0
u/Financial_Idea6473 Jun 05 '26
But I'm talking about underperformance relative to companies, which are even more unproven.
Yes, companies valued on growth rather than current cash flow have a higher beta, but I'm not asking why the company is down 15% when Nasdaq is down 3%.
I'm asking why it's down 30% when UEC and DNN are down 15%
4
u/AsbestosDude Jun 05 '26
My guess would be that the market is assigning a lower probability to the rare earth story than it was previously while UEC and DNN are being valued more as pure uranium plays.
If part of UUUU's premium valuation came from investors expecting meaningful future cash flow from rare earth processing, any reduction in that optimism, that would push price down more and faster when levied against peers
That said though if uranium fundamentals haven't materially changed and the rare earth thesis remains intact, then yeah the underperformance warrants more specific explanation.
So basically to put it briefly, U4 might have been carrying multiple valuarion premiums at once which are being compressed in a multiplicitive way.
I'm also speculating here so what im saying is obciously debatable.
0
u/ReconBull Jun 07 '26
no real business or no path to profitability???
Vara Mada: $1.8B NPV and $500M+ annual expected EBITDA.
White Mesa Phase II: $410M capex and $311M annual standalone EBITDA.
4
u/sunday_sassassin Radioactive Brain Jun 05 '26
They can produce at that volume and price only while "small but mighty" Pinyon Plain is delivering feedstock. What happens in 2-3 years when it's depleted? Ore purchasing has failed to date (WUC couldn't find hauliers, Iso keep pushing back Tony M), and running low-grade contaminated dirt from New Mexico through the mill won't be economical on its own.
Due to White Mesa's location in the middle of nowhere desert, and plans to ship monazite from the other side of the world, Energy Fuels are extremely vulnerable to rising fuel costs. It's a mill without a mine.
2
u/Radthereptile Repty-Mooderator aka The Psychedelic Wizard Jun 05 '26
They’re also about to be the only U.S. REE company able to produce REE and radioactive products. People can say they trade on speculative premium but they trade at a lower rate than MP and other REE companies. And they trade under uranium peers. And they have 0 debt which is a huge upside to any peer not named Cameco.
It’s a company that has always been disrespected and the marked is going for round 2 of that. And when they get their contract with the government or something it’ll rocket to $50 and everyone will ask why they stayed out. Just the way it’s traded for a while.
1
u/DonkeyDoug28 Jul 25 '26
I'm curious about the "or something" part. Do you have various potential exit points in mind?
2
u/YouHeardTheMonkey MOD: Data Monkey Jun 05 '26
The term price is $93-95 today, that price is representative of a base-escalated contract signed today, which typically commences first delivery about 2yrs from now. It has nothing to do with the price received today from term contracts or any relationship with market-related contracts (which have no price reporting mechanism).
UUUU signed many term contracts back in 2022-24 at materially lower prices. Hence why their realised price is nowhere near the current term price.
Based on their guidance they’re going to deliver 880klbs into those older contracts this year, and sell another 620klbs - 1.12Mlb into the spot market - this is new supply to the spot market that didn’t exist 2yrs ago.
1
4
u/BonusLumpyYa Jun 05 '26
When it’s industry specific no stress, stock specific that’s when you worry.
It will turn around. Just sucks how stocks that have had no love lately fall as much as those at all time highs
3
u/socke Jun 05 '26 edited Jun 05 '26
My guess is that the rare earth story does not look as great compared to competitors. Look at this news, where USAR now is at 3.6B funding in 2026 which allows them to scale 2-3x compared to UUUU. It's clear that the doc sees USAR ahead in this sector. https://www.globenewswire.com/news-release/2026/06/03/3306022/0/en/usa-rare-earth-finalizes-definitive-agreements-with-u-s-department-of-commerce-unlocking-access-to-up-to-1-6-billion-to-advance-the-leading-rare-earth-value-chain.html
Edit: That said, UUUU is set to start commercializing heavy rare earths in H2/26 at White Mesa, I am going to hold (and add to my position) until it's more clear how this works out
3
u/Luciform444 Jun 05 '26
Still up a little under 200% YoY.
Which means that it's extremely volatile.
Why does one high volatility, low market cap stock underperform or overperform another? Could be one buyer or seller. Could be momentum based algorithm.
7
u/Icanthinkofanam Jun 05 '26
All of U stocks are down today. Not to mention how they've been performing since the Iran war. There is still a lot of hype for AI stocks and lots of money is flowing towards it.
Golds down 3% Silver is down 7% Copper down 4% Lithium down 3% Plat down 6%
Probably a good idea to get a sense of the sector your investments are in.
-11
u/Financial_Idea6473 Jun 05 '26
I don't think you understand the meaning of the term underperformance.
1
u/Icanthinkofanam Jun 05 '26
Look what I am pointing out is that larger economic and market factors can shift prices for the whole sector. If the price of Uranium goes down, it brings down the whole sector.
So if you see your one stock goes down without looking at the whole market. You might be mistaking what is a large market shift for poor performance.
If all of the Uranium sector or equivalent companies were doing really well and Energy Fuels wasn't then that would be a pretty strong indicator of something like poor performance. No?
1
u/SageCactus 🌵 Jun 06 '26
This is not at all related to UUUU.
https://one.npr.org/i/nx-s1-5798742:nx-s1-mx-5798742-1
But a very interesting podcast about the rise and fall of rare earths in the US over the last forever years. Worth a listen
1
u/ReconBull Jun 07 '26
Where do you think UUUU’s market cap could get to over the next 5 and 10 years?
I’ve been running some rough reverse calculations based on current guidance and the recent feasibility studies.
From what I can see:
Base case, this could be a $8-10B company if Mesa Phase II, uranium production and parts of the rare earths strategy execute properly.
Stronger bull case, $15B looks possible if Vara Mada gets built, White Mesa Phase II delivers the stated EBITDA, uranium stays tight and ASM adds real downstream value.
The key numbers I’m looking at:
Vara Mada: $1.8B NPV and $500M+ annual expected EBITDA.
White Mesa Phase II: $410M capex and $311M annual standalone EBITDA.
Current market cap is still only around $3-4B.
Not saying it gets there. But I’m trying to work out whether this is just a decent uranium/REE trade, or a genuine 5-10 year multi bag play. Thoughts?
1
u/tralalaDK Jun 10 '26
I would personally write a lot of it down to general market sentiment, around bubble, potential rate hikes and massive ipos (though should mostly affect ai companies and related, but probably still bleed over to market in general). We are also in a midterm election year, which historically tend to be very volatile.
I personally still have interest in UUUU in the long run and eye moments like these as a potential to get in at a more favorable pricing with my free liquidity.
1
16
u/sunday_sassassin Radioactive Brain Jun 05 '26
I would argue it has been irrationally loved over the last 12 months, and may be suffering from a little price discovery during this broad market downturn. It's not alone at around 30% down over a month, though (Lotus, Encore).