A couple of years ago, Cameco (NYSE: CCJ) sprinted from the mid‑$20s to the mid‑$70s today, handily outpacing the S&P 500 and every large‑cap miner on the planet.
After such a big run, has the uranium leader finally outrun its fundamentals, or is it only just beginning to reflect the hidden levers of value?
Let’s dig into the numbers, the niche facts Wall Street research notes rarely print, and the question at hand, is Cameco overvalued at today’s price?
70‑plus dollars and a forties P/E
Cameco now changes hands at roughly $74 a share, good for a ~$32 billion equity valuation and an enterprise value (EV) near $32.5 billion after netting out $716 million in cash and $1 billion of debt.
On a headline basis the stock trades at ballpark 41x this year’s earnings and around 33x next year’s estimates, metrics that screen expensively in any basic screener.
National Bank Financial, for instance, just trimmed its FY‑2026 forecast to $0.99 a share. By contrast, diversified miners like Rio Tinto and BHP hover in the mid‑teens.
Yet per‑share multiples only tell half the tale. Unlike a copper or iron‑ore producer tied to spot, Cameco’s revenue is still governed by a contract book forged during the 2016–2021 bear market.
Roughly 60% of deliveries this year are locked in at fixed prices that average just $62 per pound, even as the spot price flirted with $102 in July. In other words, the income statement is playing catch‑up to the commodity curve and the earnings multiple is elevated because uranium revenues haven’t fully repriced yet.
What Fine Print Really Means
Most investors know Cameco’s contracts are inflation‑escalated. Far fewer realize that many of those agreements include “market‑transition clauses” that let customers shift from fixed to market‑related pricing once reactors enter refueling‑cycle renegotiations.
According to Cameco’s latest MD&A, ballpark 15% of its 215‑million‑pound backlog has already transitioned, and another 30% becomes eligible between now and mid‑2027.
If spot uranium merely holds the $100 mark, Cameco’s realized price could jump by another $25 to $30 per pound over the next 24 months without signing a single new deal, a pipeline of upside that never shows up in a screeners’ forward EPS.
“Hidden” Value of Westinghouse
Cameco’s 49% stake in Westinghouse Electric, acquired with Brookfield Renewable a couple of years ago, has largely been treated as a footnote. That’s probably a mistake.
In Q2 this year, Westinghouse contributed $118 million of adjusted EBITDA, a figure management just nudged up in its full‑year outlook. When you back that out, the core mining and fuel‑services business is actually trading at around 16 times 2025 EBITDA, not the 22× headline ratio often quoted.
Why does Westinghouse matter? Beyond a steady annuity of fuel‑assembly royalties, the business controls intellectual property for 435 operating reactors, data that feeds new‑build bids and, increasingly, small‑modular‑reactor designs.
If SMRs win even a sliver of the 120‑reactor pipeline BloombergNEF projects for the 2030s, Westinghouse alone could be worth $10 billion, value few uranium‑only comp tables attempt to capture.
Paying $55 a pound for $100 rock
Cameco’s tier‑one mines, McArthur River, Cigar Lake, Inkai, hold 457 million pounds of proven and probable reserves on Cameco’s share.
At the current EV of $32.5 billion, the market is valuing that rock at roughly $71 per pound EV/lb.
Strip out Westinghouse, conservatively at book value, and the implied EV/lb drops to about $55.
With spot at $100 and the long‑term contract price sitting near $70, Cameco is effectively priced as though uranium rolls back to pre‑Fukushima levels.
That reserve math doesn’t prove the stock is cheap, but it argues the market isn’t putting an irrational premium on existing ore bodies.
Production Risk Few Discuss
The bear case hinges on one under‑appreciated detail, Cameco still relies on Kazakhstan for 34% of its attributable material via the Inkai JV.
While relations remain cordial, the JV must ship uranium concentrate through Russia to reach Western converters.
One hiccup would most likely tighten supply and send prices higher, but it could also delay volumes and crimp near‑term cash flow. Investors bullish on Cameco for “security of supply” sometimes overlook that logistical wrinkle buried in the AIF footnotes.
Can Mines Hit Guidance?
Management reaffirmed 2025 production of 18 million pounds (12.6 million Cameco share) after a strong first half, citing record mill throughput at Key Lake.
That number looks modest versus licensed capacity north of 30 million pounds, but Cameco is deliberately pacing output to avoid flooding a tight market.
Should spot prices stay firm, the company might well ramp another 20% with minimal capex.
Cash Flow Vs Narrative
In the second quarter Cameco generated $321 million in net earnings and $485 million in adjusted EBITDA, translating to an annualized free‑cash‑flow yield just under 3%.
That’s slim for a cyclical miner, yet perfectly normal for a company whose realized sales price still lags spot by 40%.
As more contracts transition and new market‑linked deals kick in, Cameco has already signed 78 million pounds of new long‑term agreements since 2022, EBITDA might very well rise by well over $1 billion, enough to cut the EV/EBITDA multiple into the low teens without a single share‑price move.
Is Cameco Stock Overvalued?
If you judge purely by current‑year earnings, absolutely, the stock is rich. But if you factor in a contract portfolio that mechanically reprices higher, a half‑hidden Westinghouse option on the nuclear renaissance, and reserves valued at barely half spot uranium, the answer is far less clear.
The market is paying up for strategic scarcity, worldly insulation, and a forward cash‑flow inflection most screeners can’t see.
Cameco sits in the “strategically expensive, fundamentally reasonable” bucket. You wouldn’t buy it expecting multiple expansion from here but you’d buy it because you believe uranium prices stay elevated long enough for Cameco’s realized revenues, and free cash flow, to justify today’s sticker price. If that thesis proves right, 40× earnings today could look like 15× three years from now.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.