PLS Group Ltd (ASX: PLS) shares closed in the red on Wednesday afternoon. At the close of the ASX, the ASX mining stock was down around 2% to $6.28 a piece.
But the decline barely dented PLS Group's gains this year.
The Australian lithium miner's shares have had a fantastic run over the past year. The shares are still up around 46% for the year-to-date and its annual increase is enormous.
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So, if I'd invested $5,000 in PLS Group shares 12 months ago, what would it be worth today?
At the time of writing, the share price is a huge 369% higher than just 12 months ago.
That means that $5,000 invested in the ASX mining stock in late-May last year would be worth around $23,450.
That's an impressive increase.
Even if you invested the same amount when the ASX first opened in January this year, your $5,000 investment would already be worth around $7,300.
Why has the share price climbed so high, and so quickly?
A lot of the share price increase over the past 12 months is due to a rally in lithium prices and improved sentiment. This was primarily driven by a surge in interest in electric vehicles (EVs) and battery energy storage.
Global EV sales have been rising faster than carmakers can keep up, and demand for grid-scale energy storage amid a shift towards renewable energy is also soaring.
Ongoing tension in the Middle East, and consequential oil supply restraints, has also prompted a significant shift towards EVs as an alternative to petrol-fueled vehicles.
And as owner and operator of one of the world's largest independent hard rock lithium mines, Pilgangoora in Western Australia, PLS has naturally scooped up a lot of the demand.
But it's not just market fundamentals that have pushed the company's share price higher over the past year. The business is also booming.
The ASX mining stock posted its third quarter update in late-April. It revealed a huge 52% quarter-on-quarter revenue increase for the March quarter. This was fuelled by a 61% increase in the average realised spodumene price PLS Group received over the three months, which rose to US$1,867 per tonne (SC5.2 equivalent).
The miner also reported a 12% increase in production to 232,400 tonnes. It also said it sold 195,700 tonnes of spodumene over the same period.
What's next for the ASX mining shares? Can they keep climbing?
It looks like analyst sentiment on the ASX mining stock has started shifting, with many anticipating that the stock is reaching (or has now passed) fair value after the latest price rises.
TradingView data shows that eight out of 16 analysts have a buy or strong buy rating on the stock. Five analysts have a hold rating, and another five rate the shares as a sell or strong sell.
The average target price of $5.66 now implies a potential 10% downside at the time of writing.
Forecasts are quite split, however. Some think the shares have the potential to increase another 15% to $7.20 while others tip the shares to decline up to 59% to $2.60.
