enCore Energy: Underwhelming Results Baked-In; Look to 2027 for Growth to Resume

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enCore Energy (EU) reported its Q3/2026 results highlighted by revenues of $16.7M and a net loss of $33.9M or $0.17 per basic and diluted share. Though Q3 revenues have increased by +88% y/y, operating and development results have been disappointing over the course of the year. That said, the permitting related production shortfalls have been well documented over the year making the underlying financials a non-event and largely priced-in for some time already. Attention is now focused on 2027 when the growth and efficiency narrative should take hold once again.

UNDERWHELMING Q3/2026 RESULTS LARGELY BAKED-IN ALREADY

Specifically during the quarter, revenue of $16.7M, compared with $8.9M in Q3/2025, reflected delivery of 200,000 lbs U3O8 compared with 130,000 lbs in Q3/2025. Additionally, the average realized sales price was approximately $83.46 per lb versus $68.28 per lb previously. That said, the cost of sales totaling $17.4M, during the quarter was accordingly higher when compared with the $5.0M achieved last year. Moreover, the weighted average cost of uranium sold was $87.22 per lb versus $38.35 per lb, primarily reflecting a higher proportion of purchased uranium - purchased uranium to meet the well documented production shortfall.

YTD AS PRODUCTION STALLED, SHARES HAVE DECLINED MATERIALLY

enCore shares have declined by nearly -75% YTD as production has stalled largely due to the permitting delays for the new production areas. The situation was most visible in Q2/2026 when uranium extraction totaled a mere 131,274 lbs compared to 317,613 lbs extracted in Q2/2025. Much like in this past quarter, the drop in extracted lbs prompted the need to purchase of 360,000 lbs in Q2/2026 which pushed costs up materially to $75.54 per lb compared to a weighted average cost of $59.42 per lb in the same period 2025. Of note was that Alta Mesa's Wellfield 7 ended recovery operations due to natural run-rate depletion.

GROWTH NARRATIVE EXPECTED TO RESUME IN 2027

Given depleted wellfields and mired in permitting purgatory for much of the year, on October 27 a revised permitting timeline was announced as follows:

Upper Spring Creek PAA-1 is in the final stage of permitting: the public comment period on the Final Draft Permit closed on October 19, 2026, and final TCEQ authorization is expected on or before November 13, 2026. Operations are expected to commence before year-end.
The Alta Mesa PAA-8 and PAA-3 extensions continue to work their way through TCEQ technical review. The wellfields remain on schedule with final permitting expected by the end of the year for the PAA-3 Extension and early in the new year for P-AA8.

Specifically for the PAA-3 extension and for PAA-8, given the legislative changes to the public notice and hearing procedures implemented on May 1, 2026, there will be no opportunity for a public hearing which could have otherwise delayed the process.

Elsewhere, at Alta Mesa East, exploration drilling and the preparation of permitting applications continue for an expansion into the adjacent project area.

At Dewey Burdock, key federal permitting milestones achieved to date include Environmental Protection Agency Class III and V underground injection control permits received in October 2025 and Bureau of Land Management approval of the Plan of Operations on June 15, 2026. Preliminary engineering is ongoing for the plant site and evaporation ponds, and the company continues to advance state permitting.

VALUATION & CONCLUSION

The permitting timeline for both Upper Spring Creek, Alta Mesa PAA-8 and the PAA-3 Extension has been critical given that the Alta Mesa Wellfield 3 Extension and the Upper Spring Creek wellfield supplying the Rosita CPP have been ready for operation for some time already. We note that production from these new areas are instrumental for enCore's production growth narrative to resume, particularly since Alta Mesa's Wellfield 7 has been depleted. Ahead of the most recent 10-K filing, our estimates are as follow:

We will refine and publish our updated production estimates once additional guidance will be provided. That said, until the growth narrative resumes in 2027, we note that material workforce reductions as announced in July are expected to generate significant savings as of Q4/2026 and beyond. enCore Energy maintains ~$38M in cash and equivalents at quarter-end along with uranium inventory amounting to over 116,631 lbs (both items lower q/q). Still anchored by a $100/lb LT uranium price, after factoring in corporate adjustments, we maintain our target NAV multiple of 1.10x NAV8%. We maintain our 12-month price objective of $2.00 per share (rounded). This equates to upside of +244% from the most recent close (November 11). Shares of enCore Energy currently trade at a 0.26x P/NAV multiple.