Seeking Alpha Upgrades Centrus as 'Gift,' But DeepValue Flags High Risks and Valuation Concerns

What happened

A Seeking Alpha article published on January 13, 2026, upgrades Centrus Energy to Buy, citing a recent stock price drop as an opportunity due to improved valuation and strategic progress in HALEU enrichment. The article emphasizes Centrus's unique position as the only U.S. HALEU producer, a $900 million DOE grant, and a multi-billion dollar expansion in Piketon, Ohio, aligning with surging demand for next-generation nuclear reactors. However, the DeepValue master report, based on recent SEC filings including a Q3 2025 10-Q, rates Centrus as a POTENTIAL SELL with a base case implied value of $260, below the current price of $287. The report highlights critical risks such as high valuation multiples (P/E of 44.7x), reliance on Russian TENEX supply through 2027, execution complexity in scaling domestic enrichment, and dilution from a $1 billion ATM program announced in November 2025. Despite the bullish narrative, underlying financials show volatility, with Q3 2025 posting a gross loss and ongoing concerns over contract definitization and capital allocation discipline.

Implication

The upgrade reflects short-term sentiment on a price drop, but long-term investment merit hinges on Centrus successfully ramping unproven HALEU and LEU capacity without cost overruns or supply disruptions. High P/E and EV/EBITDA ratios of 44.7x and 53.37x, respectively, leave little margin for error if DOE task orders or margins underperform expectations. Russian supply continuity is critical until at least 2027, and any disruption could force costly replacements and contract penalties, undermining revenue stability. The $1 billion ATM program poses material dilution risk, especially if equity is issued amid earnings volatility or slower growth, eroding per-share value. Investors must monitor quarterly margins, DOE contract conversions, and capital allocation to assess whether the optimistic narrative aligns with operational realities.

Thesis delta

The Seeking Alpha article introduces a bullish counter-narrative based on recent valuation improvements and strategic assets, but this does not materially alter the DeepValue thesis, which remains rooted in cautious analysis of SEC filings. The underlying risks—including unproven operational scale, high valuation premiums, and dilution overhang—persist unchanged, suggesting no fundamental shift in the investment case. Investors should remain skeptical of optimistic projections until concrete evidence of contract execution and margin stabilization emerges from future disclosures.