Pilbara Minerals Ltd (ASX: PLS) shares have lost almost half their valuation in a year.
Shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock closed up 1.27% on Wednesday, trading for $2. This sees Pilbara stock up 16.28% over the past five trading days.
Despite that welcome lift, shares are down 49.4% since this time last year, when they were trading for $3.95 apiece.
And shareholders didn't get any reprieve from dividends over the year either. Amid a cratering lithium price, Pilbara Minerals suspended its dividend payouts in 2024.
But with Pilbara Mineral shares having tumbled to $2, is the ASX 200 miner now trading for a bargain?
For more insight into that question, we defer to Peak Asset Management's Niv Dagan (courtesy of The Bull).
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Should I buy Pilbara Minerals shares?
"Pilbara owns 100% of one of the world's largest, independent hard rock lithium operations," said Dagan, who has a sell recommendation on Pilbara Minerals shares. "Located in Western Australia's Pilbara region, the company's Pilgangoora operation produces spodumene and tantalite concentrates."
As for why he has a bearish outlook on the miner, Dagan pointed to Pilbara's recently released half-year results:
Revenue and earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first half of fiscal year 2025 were down on the prior corresponding period. The company posted a statutory loss after tax of $69 million.
Indeed, Pilbara reported underlying EBITDA of $74 million, down 83% year on year. And revenue of $426 million was down 44%. This saw management again opt not to declare a dividend.
And Dagan doesn't expect things to turn around for Pilbara Minerals shares in the short term.
"Given weaker lithium prices, we envisage further pressure as short sellers possibly push the stock lower in the short-term," he said.
What's the latest from the ASX 200 lithium stock?
Despite plunging earnings and mounting losses, Pilbara Minerals shares closed up 6.0% at $2.12 on 20 February, the day the miner reported its half-year results.
Investor sentiment may have been buoyed by the miner's reduced capital expenditure. Among the cost-cutting measures, the company placed its higher‐cost, lower‐capacity Ngungaju plant into temporary care and maintenance in December 2024. The plant can be restarted within four months.
Pilbara Minerals CEO Dale Henderson was also optimistic about the longer-term demand growth outlook for lithium.
According to Henderson:
Following a year of robust demand growth in 2024, with global investment in low-carbon energy transition worldwide exceeding US$2 trillion, we remain highly optimistic about the long‐term outlook for the lithium market.
Pilbara Minerals held $1.2 billion in cash as at December 2024.
