Global nuclear energy boom leaves U.S. uranium producer enCore struggling despite growth
Several nations worldwide are planning new nuclear power plants, while the U.S. faces a uranium supply-demand gap. Meanwhile, enCore Energy, a U.S.-based uranium producer, has seen its stock decline despite promising projects and industry growth.
Countries like Belgium, Italy, Poland, Sweden, Finland, France, Czech Republic, Romania, Japan, and Estonia are set to commission new nuclear plants in the coming years. The U.S., with an $80 billion investment, is also expanding its nuclear capacity. However, the U.S. is grappling with a significant uranium supply-demand gap, with demand increasing and supply collapsing over the last two decades.
EnCore Energy, founded in 2009, has underperformed the broad market in the last 12 months. Its stock has declined 31% while the S&P 500 rallied 13%. Despite this, the company has promising growth projects, including a major one in Texas. Analysts expect enCore Energy to double its revenue by 2026 and grow it by over 20% annually until 2029.
In the second quarter of 2024, enCore Energy extracted 203,798 lbs of uranium, a 79% increase from the previous quarter. It also narrowed its loss per share from -$0.12 to -$0.03. The company commenced uranium extraction operations in its Alta Mesa project in Texas, benefiting from a prolific district and a friendly regulatory environment. Despite these positives, enCore Energy's underperformance can be attributed to lackluster uranium prices, absence of profits, and shareholder dilution.
While global interest in nuclear energy is surging, enCore Energy faces challenges in the uranium market. Despite its promising projects and growth prospects, the company's underperformance highlights the need for improved uranium prices and profitability.
