1Q26 Update; FONSI, Part 70 Fuel License, and UK GDA Submission Drive Incremental De-Risking. Reit OW, $38 PT.

Research evidence excerpt

1Q26 Update; FONSI, Part 70 Fuel License, and UK GDA Submission Drive Incremental De-Risking. Reit OW, $38 PT.

June 4, 2026

three or more four-unit Xe-100 plants across the PJM market. Management

indicated that the company expects to announce at least one additional

1GW commercial project by year-end 2026.

Supply chain de-risking continues with SGL Carbon 10-year graphite

agreement and IHI MOU. In addition to the previously announced Doosan

(000150, NC) reservation for the reactor pressure vessel, core barrel, and

steam generator, X-Energy signed a 10-year graphite supply agreement

with SGL Carbon (SGL, NC) for medium-grain reactor graphite for the Xe-100

core, and an MOU with IHI Corporation (IHI, NC) for the commercial-

grade manufacturing of critical HTGR components. On HALEU specifically,

management indicated that the first four tons of the seven-and-a-half tons

committed by DOE have been specifically identified for the Dow project,

with the remaining three-and-a-half tons to be identified in the coming

months.

Results. Total revenue and grant income of $43.4M in 1Q26 was up 109%

Y/Y from $20.8M in 1Q25, driven by a $21.6M increase in ARDP-related

revenue and grant income. Net cash used in operating activities was

$67.3M (up 61% YoY) and net cash used in investing activities was $166.0M,

driven by $189.9M of investment purchases plus $43.0M of capex, offset

by $28.8M of ARDP capex reimbursements. The company ended 1Q26 with

$944M of total liquidity ($224M cash, $450M short-term investments, and

$270M long-term investments) and no debt.

Valuation. We arrive at our Overweight rating and 12-month price target

of $38 using a DCF model. We forecast X-Energy's financials through 2040

and discount at a 10.0% WACC, with a 3% perpetuity growth rate. Our base