The PLS Group Ltd (ASX: PLS) share price has been one of the strongest performers in the S&P/ASX 200 Index (ASX: XJO) of the past year.
As the chart below shows, it has risen by close to 100% in the last 12 months!
After such a large rise, I think it's worthwhile asking if it's an opportunity or if it has reached a plateau.
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Better lithium prices driving stronger profits
Every shareholder wants to see their business generating pleasing profits. After a difficult couple of years, PLS Group has seen an enormous upswing in its financials thanks to a large increase in the lithium price.
During FY26, the realised (sold) price for its lithium saw a 109% year-over-year increase to US$1,488 per tonne. The company also increased its production by 17% as it ramps up to meet the growing demand.
For FY26, PLS Group reported 152% growth of revenue to $1.9 billion, underlying operating profit (EBITDA) grew 1,067% to $1.1 billion, while net profit after tax (NPAT) soared 608% to $1.36 billion. Its cash margin from operations improved by 608% to $1.36 billion.
The massive improvement of profitability allowed the business to declare a dividend of 5 cents per share.
PLS Group has managed to deliver significant profits while also investing to increase production. The company is working towards its P2000 project target for Pilgangoora, with a pre-final investment decision (FID) investment of around $175 million. The Colina project feasibility study is also progressing, and it has restarted the Ngungaju processing plant.
Overall, it was an excellent year for the business. However, the result wasn't really a surprise for the market because it was clear that the lithium price was rising throughout the year.
The current PLS Group share price also reflects a lot of the improved positivity about the lithium sector.
Is the PLS Group share price attractive?
The company expects to grow production by at least 17% in FY27, a solid tailwind for earnings growth in the new financial year, though changes in lithium prices could also have a significant impact.
PLS Group highlights that lithium demand is forecast to triple by 2040, with that growth broadening across geographies and end-uses. Electric vehicle demand is growing and solar and wind generation is expected to continue rising, requiring significant energy storage.
The ASX lithium share also suggested that lengthening development timelines could constrain the industry's ability to meet the growing demand. In the 2010s, mine development took 16 years on average from discovery to production; in this decade, it has taken 18 years on average.
According to CMC Invest, there have been 12 analyst rating calls on the business within the last three months, with seven of those ratings being a buy, three being a hold, and two being a sell.
The average price target from those 12 analysts is $5.52, suggesting a potential rise of about 30% over the next year. That implies the PLS Group share price could be a solid buy today.
