Cameco (CCJ): Earnings Fell 92% and Guidance Went UP — Is CCJ Stock Worth Buying?

Cameco Corporation (CCJ) Q2 2026 — Cameco reports in CANADIAN dollars and trades in New York in US dollars. Q2 2026: revenue C$814M (-7%), net earnings C$25M / C$0.06 (-92%), adjusted net earnings C$77M / C$0.18 (-75%), adjusted EBITDA C$391M (-42%). In US dollars that adjusted figure is ~$0.13 on ~US$573M. The stock was quoted up ~4% pre-market near $92, opened $90.63, traded to $91.38, reversed to $83.93 and closed $86.38, DOWN 2.10%. The 92% earnings collapse was almost entirely a comparison, not an operating failure: Q2 2025 included roughly US$170M from Westinghouse's Dukovany contract that did not repeat, and Cameco's 49% share of Westinghouse swung from C$126M of net earnings to a C$10M LOSS. Underneath, the mine had a good quarter — a record average realized price of US$67.79/lb (+18%) and a RAISED full-year revenue guide. But two things the coverage missed. First, Cameco's blended produced-and-purchased cost rose 36% to C$62.21/lb while the realized price rose only 15%, because it bought 2.8M lb at C$91.40 (US$66.60) against a US$67.79 realized price — about a dollar a pound. Roughly a third of what Cameco sells every year it buys, not mines. Second, Cameco materially UPGRADED its AP1000 economics: Westinghouse's share of a two-unit project moved from 25-40% to 40-45%, at ~20% EBITDA margin instead of 10-20%. THE CALL: REDUCE (3/5, A 2035 PRICE ON A 2026 BUSINESS) — base-case value ~$66.0 vs ~$86.38 today. KEY METRICS: - OUR CALL: REDUCE 3/5 — fair value ~US$66 vs the $86.38 close (-24%). Street: Buy, US$134.80 avg (1 strong buy/12 buy/5 hold/2 sell of 20), median $131, range $104-$175 = +56%. We DIFFER: many targets were struck at $100-$134 and have not reset. - DCF (US$, 435.5M shares, USD/CAD 1.40): owner earnings = consolidated adj. EBITDA incl. 49% of Westinghouse, less capex incl. its Westinghouse share, less cash interest and cash tax = ~US$0.6B in 2026, ~US$1.45B by 2030, ~US$2.0B by 2032. At 9% / 3.5% terminal = $53. Bear $21 · Bull $103 · weighted 25/45/30 = $60. We sit at $66 for the AP1000 repricing, the C$559M CRA deposit and FX. - REVERSE DCF: at $86.38 the US$37.6B market value (no net debt) requires ~US$2.1B of owner earnings starting NOW, against ~US$0.6B today. Our base case does not reach it until the 2030s. - THE PRINT (C$): revenue $814M (-7%), gross profit $190M (-26%), net earnings $25M / $0.06 (-92%), adjusted net earnings $77M / $0.18 (-75%), adjusted EBITDA $391M (-42%), cash from operations $131M (-72%). H1 revenue flat at $1,659M. - URANIUM: sales 7.1M lb (-18%), production 3.9M lb (-15%) on spring road flooding. Realized price US$67.79/lb (+18%) / C$93.13 (+15%). Revenue $659M, EBT $170M, adj EBITDA $252M. - THE SQUEEZE: produced-and-purchased cost +36% to C$62.21/lb. Produced pounds cost C$41.26; but 2.8M lb were PURCHASED at C$91.40 (US$66.60) vs a US$67.79 realized price. 2026 plan: produce 19.5-21.5M lb, SELL 29-32M lb. - WESTINGHOUSE (49% share): net LOSS C$10M vs +C$126M; adj EBITDA C$163M vs C$352M. 2026 guide: US$370-430M adj EBITDA but a NET LOSS of US$10-75M — US$275-290M of D&A (mostly 2023 purchase-price amortisation) plus US$120-135M of finance costs. - AP1000 UPGRADE: Westinghouse share of a 2-unit project 40-45% (was 25-40%) at ~20% EBITDA margin (was 10-20%). On a US$20-26B project that is US$8-11B of revenue and ~US$1.6-2.2B EBITDA per project, plus US$45-60M/yr of service revenue for 80+ years. Pipeline up to 91 units / 105 GWe; core backlog US$13.2B; DOE conditionally committed US$17.5B for up to 10 reactors. 51 of 91 units are still in origination. - GUIDANCE RAISED: consolidated revenue C$3.32-3.57B (was C$3.13-3.37B); uranium revenue C$2.70-2.91B; realized price C$91-96/lb (was C$85-89); unit cost of sales C$63.00-67.50/lb. Production 19.5-21.5M lb UNCHANGED. FX assumption 1.35 (was 1.33). - CASH & BALANCE SHEET: H1 adj EBITDA C$899M produced C$109M of operating cash — 12% conversion, on a C$255M working-capital build and higher taxes. Cash C$1.1B vs ~C$1.0B debt, C$1.0B facility undrawn. CRA still holds C$559M; the Supreme Court closed 2003-2006 in Cameco's favour. - THE MARK: on July 2 Cameco paid C$115.755M for an extra 2.871% of Cigar Lake (stake now 57.418%). That values 100% of the mine at ~C$4.0B / ~US$2.9B — Cameco's share is ~4% of its US$37.6B market cap. - MARKET: UxC spot US$85.00/lb at June 30; long-term indicator US$95.50/lb, the highest since 2011 in constant dollars. Contract book ~28M lb/yr committed 2026-2030. What to watch: Bullish: a definitive AP1000 EPC contract in the US converting the DOE's conditional US$17.5B commitment, or 2027 realized price above ~US$74/lb. Bearish: 2027 realized under ~US$72/lb with spot above US$85, Westinghouse 2026 adjusted EBITDA below the US$370M low end, or another half-year converting under a third of EBITDA to cash. We'd buy nearer ~$55. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.