r/stocks
Is Constellation Energy (CEG) Undervalued?
Author argues CEG is undervalued based on low PEG (0.83) and forward PE (18.59), citing its dominant US nuclear fleet as a key asset for long-term growth.
- Attractive valuation metrics with a PEG ratio of 0.83 and Forward PE of 18.59 suggest the stock is priced below its growth potential.
- Possession of the largest nuclear fleet in the US provides a durable competitive moat and positions the company to benefit from rising AI-driven power demand.
- Strong fundamentals including a 13.3% profit margin and projected 20-25% EPS growth support the case for long-term value appreciation.
- Low dividend yield of 0.68% may not appeal to income-focused investors compared to other utility sector peers.
- Complexity in analyzing the energy industry and regulatory risks associated with nuclear power could introduce unforeseen volatility.
Constellation Energy (CEG) has been on my watchlist for a few months. Based on my research it appears undervalued but analyzing this industry is somehwat complicated. Here are some numbers as of 6/8//26:
Market Cap: 90.92B
PE: 21.86
FWD PE: 18.59
PEG: 0.83
P/S: 3.19
EV/EBIDTA: 18.07
Debt/Equity: 0.67
Profit Margin: 13.30%
EPS Growth Next 5 Years: \~20-25%
Dividend Yield: 0.68%
Beta: 1.13
The company is quality, durable, and has diversified revenue streams, a strong customer base, and the largest nuclear fleet in United States. The upside seems attractive \~40% off ATH at 18X Forward Earnings and <1 PEG. I am thinking about starting a long term position in the company but am curious what you all think? Looking forward to hearing your thoughts!
I got rid of mine
Cashed mine out above $300 because it just wasn't growing
Bought back a small position at $257 but not too optimistic about it
They had a lawsuit they lost recently, check into that
I don't think antitrust lawsuit affects the current price that much.
They also have a shareholder fraud lawsuit against them in addition to the nationwide employee antitrust suit
I will look into this thanks
I think so. It's one of the cheapest ways to invest in power. Not as flashy or meme as BE, but a lot cheaper, a lot less risk. VST is getting cheap too.
Agreed and I also like VST
VST deals in a lot of natural gas. CEG is more pure play nuclear. Makes it a question of which you think will be bigger in the future. My bet is on nuclear long term.
Nuclear power is surely going to be more valuable than gas or other fossil fuels in the future. Fossil fuels need to be ramped down and nuclear will fill a decent bit of that hole.
Yep. Triggered my buy limit at 250.5 today. Have another one at 247.06. Oh well. It'll break 300 (again) like clockwork.
Churning out of individual stocks into ETFs
What is the gerenal bull thesis for buying? Why now?
It is trading at a discount nearly 40% lower than ATH. This runup was somewhat unsustainable and the result of too much AI hype but now it is trading at just 21X earnings and 0.8 peg. They have the largest nuclear fleet in the United States and partnerships with Microsoft and Meta. So this is more of a long term bet on a large cap, mature power production and nuclear energy company. To answer your question why now, it is not exactly that this is the perfect time to buy. I think it is a solid entry point if your holding period is 5-10+ years.
I actually like the future outlook for nuclear. I think we cam assume fossil fuels need to be ramped down over the next 5 to 10 years. Solar and wind power can only supply a lomited amount of our base load power as they are inherently intermittent. This makes nuclear look much more valuable over the next 5 to 10 years.
The main bear case specifically against this stock would be small modular reactors progressing but I think they are a long way off yet.