Why Energy Fuels Stock Rose 15% Thursday

Here’s why Energy Fuels (TSX:EFR) stock jumped by nearly 15% on Thursday.

| More on:

What happened?

The shares of Energy Fuels (TSX:EFR)(NASDAQ:CLNE) staged a sharp recovery Thursday morning after consistently falling in the previous four sessions. At the time of writing, ERF stock was trading with nearly 15% advances for the day at $12.09 per share. Today’s rally helped EFR stock extend its year-to-date gains to more than 25% against a 2% rise in the TSX Composite Index in 2022 so far.

So what?

Energy Fuels is a Lakewood-based uranium mining company with a market cap of about $1.7 billion. Today’s sharp gains in EFR stock came after a New York-based equity research and investment firm H.C. Wainwright raised its target price on the stock from $8.50 to $9.75 per share. While its new target price was already 7% lower than Energy Fuels stock’s last closing price of $10.53 per share, the upgrade still seemingly boosted investors’ confidence.

Consistently rising uranium prices amid the ongoing Russia-Ukraine war could be another reason for today’s sharp rally in Energy Fuels stock.

Now what?

In 2021, Energy Fuels reported a solid 92% year-over-year increase in its total revenue to US$3.18 million. However, its latest annual revenue figure fell short of Street analysts’ consensus estimate of around US$4.88 million. In its latest earnings report released earlier this week, it mentioned that “while the company chose to not sell any uranium during 2021, it is now actively engaged in pursuing selective long-term uranium sales contracts.” Given that, I expect Energy Fuels to report much stronger financial growth in the coming years.

As I noted above, the recent Russian invasion of Ukraine has triggered a sharp rally in uranium prices, because Russia is one of the major suppliers of uranium and nuclear fuel to the U.S. and Europe. A stronger price environment could boost Energy Fuels’s margins in the near term and keep its stock soaring.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.

More on Energy Stocks

Muscles Drawn On Black board
Dividend Stocks

TFSA: 2 Dividend Stocks That Could Rally in 2025

These two TSX dividend stocks can be excellent holdings for your TFSA leading into another year of stock market investing.

Read more »

Hiker with backpack hiking on the top of a mountain
Energy Stocks

Where Will CNQ Stock Be in 5 Years?

Canadian Natural Resources (TSX:CNQ) recently acquired $6.5 billion worth of assets from Chevron (NYSE:CVX).

Read more »

Start line on the highway
Dividend Stocks

TFSA Passive Income: 4 Stocks to Buy and Never Sell

Looking for stocks that create perfect passive income? This TFSA dream team is the perfect portfolio just waiting to happen.

Read more »

A worker uses a double monitor computer screen in an office.
Energy Stocks

Best Stock to Buy Right Now: Canadian Natural Resources vs Suncor?

When choosing between two energy stocks, it’s a good idea to understand and compare their business models, and not just…

Read more »

A lake in the shape of a solar, wind and energy storage system in the middle of a lush forest as a metaphor for the concept of clean and organic renewable energy.
Energy Stocks

Is Northland Power Stock a Buy for its 5.6% Dividend Yield?

Northland Power stock offers a nice monthly dividend with upside potential for when its construction projects come online through 2027.

Read more »

A child pretends to blast off into space.
Energy Stocks

Is TC Energy Stock a Good Buy?

Here are some key reasons why TC Energy stock looks even more attractive to buy after its recent South Bow…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

3 Must-Buy Energy Stocks for Canadians in October

Top Canadian energy stocks are heating up this October. Secure your share of the potential gains now.

Read more »

nuclear power plant
Energy Stocks

1 Trending Growth Stock Down 8% to Buy and Hold for the Long Haul

This top mover has risen about 40% in the last month but is still down from its all-time high.

Read more »