Is Ur-Energy (TSE:URE) A Risky Investment?

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We can see that Ur-Energy Inc. (TSE:URE) does use debt in its business. But the real question is whether this debt is making the company risky.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Why Does Debt Bring Risk?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. When we think about a company's use of debt, we first look at cash and debt together.

What Is Ur-Energy's Net Debt?

The image below, which you can click on for greater detail, shows that at September 2025 Ur-Energy had debt of US$16.9m, up from none in one year. However, it does have US$52.0m in cash offsetting this, leading to net cash of US$35.1m.

A Look At Ur-Energy's Liabilities

Zooming in on the latest balance sheet data, we can see that Ur-Energy had liabilities of US$9.76m due within 12 months and liabilities of US$70.5m due beyond that. Offsetting this, it had US$52.0m in cash and US$2.74m in receivables that were due within 12 months. So it has liabilities totalling US$25.5m more than its cash and near-term receivables, combined.

Since publicly traded Ur-Energy shares are worth a total of US$572.6m, it seems unlikely that this level of liabilities would be a major threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. Despite its noteworthy liabilities, Ur-Energy boasts net cash, so it's fair to say it does not have a heavy debt load! When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Ur-Energy's ability to maintain a healthy balance sheet going forward. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

View our latest analysis for Ur-Energy

In the last year Ur-Energy wasn't profitable at an EBIT level, but managed to grow its revenue by 139%, to US$39m. So there's no doubt that shareholders are cheering for growth

So How Risky Is Ur-Energy?

By their very nature companies that are losing money are more risky than those with a long history of profitability. And the fact is that over the last twelve months Ur-Energy lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through US$81m of cash and made a loss of US$79m. With only US$35.1m on the balance sheet, it would appear that its going to need to raise capital again soon. Importantly, Ur-Energy's revenue growth is hot to trot. High growth pre-profit companies may well be risky, but they can also offer great rewards. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 2 warning signs for Ur-Energy (1 doesn't sit too well with us) you should be aware of.

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.