On Tuesday, H.C. Wainwright adjusted its outlook on UR-Energy (NYSE:URG), reducing the stock's price target to $3.40 from the previous $3.60, while continuing to endorse the stock with a Buy rating. The revision follows UR-Energy's recent operational update for the first quarter of 2024, disclosed on April 23.
The uranium producer reported capturing approximately 38,221 pounds of U3O8 during the quarter. It also dried and packaged around 39,229 pounds of U3O8, and shipped 35,445 pounds of the same material. By the end of the quarter, UR-Energy's inventory stood at approximately 80,465 pounds of U3O8. In addition, the company had drummed inventory of about 26,062 pounds and finished inventory at the conversion facility of approximately 79,235 pounds of U3O8.
The operational update further highlighted that UR-Energy is ramping up operations at its Lost Creek facility. The company anticipates bringing two additional header houses online over the year. UR-Energy has 13 drill rigs active at the site, with plans to deploy an additional rig in early May.
Progress has been made in drilling into Header House 2-11, while completion tasks for Header House 2-8 are still ongoing. The company has finished the fabrication process for Header Houses 2-8 and 2-9, with Header House 2-8 expected to become operational in May.
The adjustment in the price target reflects the latest operational achievements and projections for UR-Energy as it continues to develop its mining capabilities and infrastructure. Despite the lowered target, H.C. Wainwright maintains a positive stance on the stock's potential.
InvestingPro Insights
InvestingPro data reveals a mixed financial picture for UR-Energy. The company has experienced an extraordinary revenue growth of 92,947.37% in the last twelve months as of Q4 2023, highlighting a significant expansion in sales. However, this growth comes with a caveat; the gross profit margin stands at -124.91%, indicating that the cost of goods sold exceeds the revenue generated, which is a concern for profitability.
Despite these challenges, UR-Energy's stock has had a high return over the last year, with a price total return of 94.87%. This suggests that investor confidence in the stock has remained strong, possibly due to the company's strategic developments or broader market trends. Additionally, the company holds more cash than debt on its balance sheet, which is an InvestingPro Tip that signals financial stability and could provide some comfort to investors concerned about the company's negative profit margins.
For those considering an investment in UR-Energy, it's worth noting that analysts do not anticipate the company will be profitable this year. However, they do expect sales growth in the current year, which could be a positive sign for the company's future performance. For a deeper analysis and more InvestingPro Tips, including whether liquid assets exceed short term obligations and the implications of trading at a high revenue valuation multiple, visit https://www.investing.com/pro/URG. There are a total of 9 additional InvestingPro Tips available, which could further inform your investment decisions. Remember, you can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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