Cameco shares fell by -1.4% during the day's morning session, and are now trading at a price of $105.4. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.
Cameco's Valuation Is in Line With Its Sector Averages:
Cameco Corporation provides uranium for the generation of electricity. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 20.25 and an average price to book (P/B) ratio of 2.31. In contrast, Cameco has a trailing 12 month P/E ratio of 119.8 and a P/B ratio of 6.81.
Cameco has moved 98.1% over the last year compared to 18.5% for the S&P 500 — a difference of 79.5%. Cameco has a 52 week high of $110.16 and a 52 week low of $35.0.
Wider Gross Margins Than the Industry Average of 21.0%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $1,863 | $1,800 | $1,475 | $1,868 | $2,588 | $3,136 |
| Gross Margins | 13% | 6% | 0% | 12% | 22% | 25% |
| Net Margins | 4% | -3% | -7% | 5% | 14% | 5% |
| Net Income (M) | $74 | -$53 | -$103 | $89 | $361 | $172 |
| Net Interest Expense (M) | $62 | $66 | $39 | $39 | $51 | $85 |
| Depreciation & Amort. (M) | $276 | $209 | $190 | $177 | $220 | $281 |
| Earnings Per Share | $0.19 | -$0.13 | -$0.26 | $0.22 | $0.83 | $0.39 |
| EPS Growth | n/a | -168.42% | -100.0% | 184.62% | 277.27% | -53.01% |
| Avg. Price | $10.15 | $9.82 | $19.27 | $24.15 | $43.1 | $106.91 |
| P/E Ratio | 53.42 | -75.54 | -74.12 | 109.77 | 51.93 | 267.27 |
| Free Cash Flow (M) | $527 | $57 | $458 | $305 | $688 | $905 |
| Total Debt (M) | $997 | $996 | $996 | $997 | $1,284 | $996 |
| Net Debt / EBITDA | -0.18 | 0.59 | -4.63 | -0.76 | 1.43 | 0.5 |
| Current Ratio | 6.51 | 6.4 | 5.18 | 5.92 | 1.55 | 1.62 |
Cameco benefits from generally positive cash flows, wider gross margins than its peer group, and a strong EPS growth trend. The company's financial statements show a decent current ratio of 1.62 and healthy leverage levels.
