Paladin Energy Ltd (ASX: PDN) shares have taken a steep fall over the past six months.
That's despite yesterday's strong run, which saw shares in the S&P/ASX 200 Index (ASX: XJO) uranium stock close up 8.2% at $7.45 apiece.
Yet only six months ago, on 14 May, those same shares closed out the day changing hands for $16.37 each.
That sees Paladin Energy shares down a painful 55% in half a year.
To put that in context, the ASX 200 has gained almost 6% over this same period.
Though to be fair, most ASX uranium stocks are also deep in the red over the last six months, with the uranium price having retraced from around US$93 per pound to US$77 per pound since early May.
What's been pressuring the ASX 200 uranium stock?
Atop the slumping uranium price, which as recently as February stood at US$108 per pound, Paladin Energy shares have suffered a few outsized daily losses over the past six weeks.
On 28 October, shares closed the day down 15.3% following the miner's first quarter update.
On the positive side, production at Paladin's Langer Heinrich Mine (LHM), located in Namibia, continued to ramp up over the quarter. The miner produced 640,000 pounds of U3O8 over the three months, up 23% from the previous quarter.
But ASX investors got the jitters after management reported on "short-term operational challenges" that impacted ore feed, recovery rates and production volumes at LHM. To address those ongoing issues, the company said it will shut down operations for around two weeks in November.
Which brings us to the next big down day for Paladin Energy shares.
On Tuesday, 12 November, the ASX 200 uranium stock closed the day down a sharp 28.9%.
This followed a disappointing full-year guidance update for LHM.
After lower-than-expected uranium production results in October, management decreased its FY 2025 production guidance to 3.0 million to 3.6 million pounds, down from the prior guidance of 4.0 million to 4.5 million pounds.
Why Paladin Energy shares look like a bargain now
So, why do I think Paladin Energy shares are now trading at a long-term bargain?
Well, in short, I believe investors have overreacted to the recent commissioning issues encountered during the ramp-up stages at LHM.
While that's clearly disappointing in the short term, the recent setbacks appear temporary.
With the planned shutdown at LHM scheduled for the second half of November, management expects to achieve higher uranium production levels in the second half of FY 2025.
On the growth front, shareholders of Fission Uranium Corp (TSX: FCU) approved Paladin Energy's takeover offer in September.
"Fission's Patterson Lake South project is a natural fit for Paladin, delivering medium-term development potential to augment production from the recently restarted Langer Heinrich Mine," Paladin CEO Ian Purdy said on the day.
And for investors with a long-term horizon, I believe the nuclear renaissance story that reignited interest in uranium miners in 2023 and into 2024 hasn't gone away.
With nations around the world eager to secure low-emission, reliable baseload power, 27 countries have declared their intention to ramp up their own nuclear energy mix. Indeed, the World Nuclear Association expects that global demand for uranium will likely outstrip global supply through to 2040.
And that's not even factoring in the massive amount of energy that's likely to be required to run the power-hungry data centres behind the artificial intelligence (AI) revolution.
In what could spell good news for Paladin Energy shares over the longer term, companies including Microsoft (NASDAQ: MSFT) are turning to nuclear power to fuel their own AI expansion projects.
