A stock can lose one-third of its value without losing one-third of its business. That uncomfortable gap has opened at one of Canada’s most important energy companies, turning a market darling into a far more interesting long-term candidate. So, let’s look into that one stock and what to consider.
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Considerations
A falling price doesn’t automatically create value. Sometimes the market is removing a premium that never belonged there. Investors buying during a stock market correction should therefore ask whether the company’s future cash flows weakened as quickly as its shares.
That question becomes especially useful in nuclear energy. Reactors take years to approve and build, uranium mines can take even longer, and neither supply chain responds quickly when demand rises. The International Energy Agency says support for expanding nuclear power now exists in more than 40 countries as electricity demand from data centres, artificial intelligence, and electrification climbs.
A decades-long investment therefore needs more than exposure to today’s uranium price. It should own scarce deposits, long customer contracts, fuel-processing capabilities, and technology that earns money from the reactors themselves. Very few public companies bring that entire nuclear toolbox to the job.
A nuclear company with several engines
Cameco (TSX: CCO) mines uranium from major Canadian and international operations, converts and manufactures nuclear fuel, and owns 49% of Westinghouse. Westinghouse supplies reactor technology, parts, engineering, and maintenance to utilities, placing Cameco stock on both sides of the nuclear renaissance.
Westinghouse technology is used by 57% of the global operating reactor fleet, while the company is pursuing as many as 91 AP1000 reactor opportunities. Each new reactor could create equipment and service revenue for Westinghouse, followed by decades of uranium and fuel demand. Nuclear plants are not known for impulse purchases.
Into earnings
Cameco stock’s second quarter looked considerably less magnificent. Net earnings fell to $25 million, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped to $391 million. Lower deliveries, operational disruptions, and the absence of a large Westinghouse project contribution from the prior year hurt the comparison.
The wider picture held up better. First-half uranium adjusted EBITDA increased to $676 million from $641 million, supported by improving realized prices. Management maintained its 2026 uranium-production outlook and has contracts covering average annual deliveries of more than 28 million pounds through 2030. Cameco stock also increased its ownership of the tier-one Cigar Lake mine.
Why the 28% drop deserves attention
Cameco stock reached an all-time high of $182.72 on January 29. Its July 31st close of $132 represents a decline of about 28%. Also worth considering? Shares are up about 5% in the last week at writing. Yet while the retreat offers a better entry point into one of the strongest Canadian materials stocks, “better” shouldn’t be mistaken for “cheap.”
The shares still trade near 60 times forward earnings. That valuation assumes years of nuclear growth, stronger uranium pricing, and successful Westinghouse execution. Mine disruptions, reactor delays, weaker commodity prices, cost overruns, or changing government policy could send the stock lower again.
Foolish takeaway
I’d build a Cameco stock position gradually rather than attempt to identify the precise bottom. Its balance sheet ended June with $1.1 billion in cash against $1 billion of debt, providing room to manage the next operational surprise without passing around a financial collection plate.
The next quarter may remain lumpy, and the next year could be volatile. The more useful horizon is measured in reactor lives. If global nuclear capacity keeps expanding, Cameco stock’s mines, contracts, fuel services, and Westinghouse stake could make today’s 28% selloff look like an early chapter in a much longer growth story.
