At 14 cents, has the Core Lithium share price become a bit of a joke?

Core Lithium's recent losses would be no joke for long-suffering investors…

| More on:
A woman sits on a step laughing at something on her mobile phone as it is being charged by a lithium-powered battery.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Depending on who you ask, the recent movements of the Core Lithium Ltd (ASX: CXO) share price might be described either as tragic or as a joke (or perhaps even both).

For long-term shareholders of this ASX lithium stock, there's probably not much to laugh about, considering Core Lithium has lost a brutal 48.15% of its value over 2024 to date alone. That's going off the current Core Lithium share price of 14 cents.

Over the past 12 months, those losses extend to an even more savage 86.41%. The company is also down around 92% from its last all-time high of around $1.70 per share which we saw back in late 2022.

If one doesn't own Core Lithium shares, this dramatic drop might make the idea of investing in Core Lithium today appear to be some kind of joke.

Indeed, imagine if one had told investors back in late 2022 when Core Lithium was going for close to $2 a pop, that the company was destined for a 14-cent share price. They would have probably thought you were joking.

Core Lithium's woes have stemmed from a few factors. Lithium prices have dramatically come off the boul over the last 12 months. Producers like Core have had to battle with an excess of supply in the rechargeable battery ingredient.

Core Lithium's flagship Finniss project was even forced to suspend production earlier this year thanks to falling prices.

It also didn't help sentiment when Core Lithium posted a net loss of $167.6 million for the six months to 31 December 2023. A recent quarterly update has done nothing to sway opinions to date.

But is the current Core Lithium share price still a joke at its current levels?

Are Core Lithium shares laughably cheap or comically expensive?

Unfortunately for Core Lithium investors, at least one ASX expert doesn't seem to think there's any value to be found in this lithium stock right now.  Earlier this month, my Fool colleague looked at ASX broker Goldman Sachs' views on Core.

Whilst Goldman predictably didn't call Core Lithium shares a joke, the broker still gave the company a 'sell' rating, along with a 12-month share price target of just 11 cents. If realised, that would see Core shares dip down to new five-year lows.

Goldman cited valuation concerns compared to its peers as one of the reasons its analysts are bearish on Core. The brokers also suspect the company won't be able to restart production at Finniss for at least the remainder of 2024.

Foolish takeaway

Whilst it might seem harsh to call Core Lithium shares a joke, this company's experience over the past 12 months has been a textbook disastrous investment.

But if Core Lithium can recover from its recent lows and survive until the next rebound in lithium prices (whenever that may come), perhaps the joke will be on Core's detractors and short-sellers. We'll have to wait and see.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A young man goes over his finances and investment portfolio at home.
Materials Shares

Higher or lower: Where next for Pilbara Minerals shares?

This lithium miner's shares have been on a wild ride. Where next for them?

Read more »

A group of three men in hard hats and high visibility vests stand together at a mine site while one points and the others look on with piles of dirt and mining equipment in the background.
Materials Shares

How much could $10,000 invested in Fortescue shares be worth next year?

Here's what one broker thinks this miner's shares could be worth next year.

Read more »

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Here is the latest lithium price forecast through to 2027

Will lithium rebound any time soon? Let's find out what Goldman Sachs is forecasting.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Should you buy BHP shares after recent weakness?

The mining giant's shares pulled back yesterday. Should you be taking advantage?

Read more »

A person wears a roaring lion mask.
Share Gainers

Guess how much a $3,000 investment in Liontown shares ballooned to in just one month

After a lengthy slide, Liontown shares came roaring back this past month.

Read more »

two magicians wearing dinner suits with bow ties wave their magic wands over a levitating bag with a dollars sign on it.
Share Market News

ASX 200 shares vs. property: Which has performed better since the COVID crash?

We reveal which property markets and ASX 200 shares have risen the most since COVID-19 hit us.

Read more »

A woman is very excited about something she's just seen on her computer, clenching her fists and smiling broadly.
Materials Shares

Why did the Sayona Mining share price just leap 5%?

The Sayona Mining share price is smashing the benchmark today. But why?

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Mergers & Acquisitions

BHP shares on watch after new $74b Anglo American takeover offer rejected

Is it third time lucky for the mining giant?

Read more »