After surging practically 28% to this point in October, Cameco (TSX:CCO) is at the moment among the many top-performing TSX shares of the month. On October 28 alone, CCO inventory jumped practically 23% to $148.98 per share, extending its year-to-date good points to round 102%. That’s a large leap for a large-cap inventory that’s already had a robust yr.

However behind this value surge is a a lot larger story. On this article, I’ll unpack what’s pushing Cameco inventory increased, how the enterprise is performing financially, and whether or not Cameco nonetheless has extra room to run.

What’s fueling Cameco inventory’s latest surge?

The sharp rally in Cameco inventory earlier this week was primarily due to an enormous nuclear vitality partnership in the USA, as its 49% stake in Westinghouse is popping out to be a game-changer. On October 28, the corporate introduced a historic settlement with the U.S. authorities and Brookfield Asset Administration to assemble Westinghouse nuclear reactors value not less than US$80 billion. This transfer not solely highlights Cameco’s significance within the nuclear gasoline cycle but in addition strengthens its monetary development visibility for years to come back.

Equally, in September, it signed a long-term provide take care of Slovenské elektrárne, increasing its international footprint additional into Europe. In the meantime, a 15-year transportation settlement with Indigenous-owned Rise Air highlighted Cameco’s sturdy neighborhood relationships and steady operational base in northern Saskatchewan.

These developments, together with uranium costs hitting multi-year highs, have put Cameco inventory on development buyers’ radar this yr.

Monetary efficiency exhibits sturdy upward momentum

Along with such growth-oriented offers, Cameco’s stable monetary efficiency can also be serving to it acquire buyers’ confidence in 2025. Within the second quarter, the corporate posted a 4% YoY (year-over-year) improve in its adjusted internet revenue to $308 million. Its adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) for the quarter practically doubled from a yr in the past to $673 million, largely resulting from increased gross sales volumes, improved costs, and elevated fairness earnings from Westinghouse.

Whereas the deliberate upkeep at its Key Lake mill barely pushed up prices final quarter, Cameco nonetheless expanded margins throughout the board. In truth, its adjusted EBITDA margin jumped to 76.7% within the quarter, up from 56.3% a yr in the past.

Manufacturing challenges, however development technique stays on monitor

Actually, Cameco did face a manufacturing setback just lately. In late August, it trimmed its 2025 uranium manufacturing outlook on the McArthur River/Key Lake operations to 14 to fifteen million kilos resulting from delays in floor freezing and new tools commissioning.

However what’s spectacular is how the corporate has managed the disruption. Greater output from its Cigar Lake mine and diversified sourcing choices nonetheless helped it keep on monitor with supply commitments. As well as, Cameco’s sturdy steadiness sheet with $716 million in money and an undrawn $1 billion credit score line additionally gives it with a cushion to take care of sudden challenges.

On the identical time, Cameco now expects its common realized uranium value to rise to $87 per pound, up from earlier estimates of $84. Meaning it will probably generate extra income even with decrease output.

Lengthy-term partnerships sign extra room to develop

As of June 30, Cameco had commitments requiring supply of about 28 million kilos per yr by 2029. That constant demand is probably going to assist stabilize its income and defend it towards spot market volatility.

In the meantime, its rising position within the U.S. nuclear buildout by Westinghouse is probably the largest long-term development driver. With sturdy coverage help for nuclear throughout Europe, the U.S., and elements of Asia, Cameco might proceed to profit for years to come back. And given its present fundamentals, it might not be too late for buyers to get in.