The Allkem Ltd (ASX: AKE) share price has been up, down, and back up again in 2022.
But those who invested in the lithium producer at the start of the year have so far come out on top. Though, they might have experienced a few restless nights during that time.
At its lowest point of 2022, Allkem shares had plunged 23% year to date. Luckily, that dip has since corrected itself. Indeed, the stock surged to a new record high of $16.08 in mid-September.
But are Allkem shares a good investment?
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No pain, no gain
Let's imagine that I had invested $1,000 in Allkem shares on the first trading day of this year. That likely would have seen me walk away with 89 shares, having paid $11.20 apiece.
So far, my pretend investment has been a good one. Those 89 shares would have been worth approximately $1,290 at Tuesday's close.
That's a better result than if that same $1,000 had tracked the S&P/ASX 200 Index (ASX: XJO). The index has dumped 10.5% so far this year, meaning my initial investment would be worth just $895 today.
However, at the Allkem share price's February trough, my 89 shares would have been valued at around $770 – a notably disappointing short-term investment.
It's also worth noting that the company isn't a dividend payer. Thus, investors haven't received a portion of its profits to add to their investment's returns.
So, with my imagined investment having flourished this year, albeit with some notable rough patches, would now be a good time to buy into the stock in reality?
Could Allkem shares offer more upside still?
It hasn't only been the Allkem share price posting a strong performance in 2022. The company has also been on a roll.
It revealed record earnings in August, bringing in a US$605 million gross profit for financial year 2022. And more great things are expected for the company's future.
The lithium company plans to triple its production by 2026. On top of that, the Australian government expects lithium prices will surge in the near future amid increasing demand, as my Fool colleague Bernd reports.
Thus, on paper, the future looks remarkably bright for the Allkem share price. And I'm not alone in thinking so.
Allkem is broker Wilsons' preferred lithium buy. The expert likes the company's geographic diversity and its position as one of the world's major producers, The Motley Fool Australia's James reports.
Meanwhile, Macquarie reportedly has an outperform rating and a $21 price target on the stock, representing a potential 44% upside on its previous close. And Bell Potter is said to be even more bullish, tipping Allkem shares to gain 49% to reach $21.58.
