Lithium Americas Shares Surge 69% in 6 Months: Should You Invest Now?

Shares of Lithium Americas Corp. LAC have gained momentum in the past six months. The Canadian mining company’s shares have soared 68.6% over the past six months, outperforming the Zacks Mining - Miscellaneous industry’s growth of 7.7%. 

Lithium Americas has also outperformed industry peers, including BHP Group Limited BHP and Sigma Lithium Corporation SGML. BHP’s shares have gained 7% while Sigma’s shares have risen 58.2% over the same period.

6 Month Price Performance Comparison

Factors Stimulating LAC’s Performance

Lithium Americas is developing the Thacker Pass lithium mine in northern Nevada, home to the world’s largest known measured lithium resource and reserve. The project is operated through a joint venture in which Lithium Americas holds a 62% stake and serves as project manager, while General Motors GM owns the remaining 38%. The company is working to bring Phase 1 of Thacker Pass into production and is aiming for a planned output of 40,000 tons per year of battery-grade lithium carbonate.

Construction at the Thacker Pass project is moving forward. The company expects to finish mechanical construction of the Phase 1 processing plant by late 2027. Engineering work was more than 80% complete as of Sept. 30, 2025, and is on track to exceed 90% by the end of the year. Completing detailed engineering early helps reduce risks related to the project’s schedule and budget.

The company has also signed purchase agreements for key long-lead equipment, infrastructure and services needed to build the processing plant, as well as for development and mining activities at Thacker Pass. As of Sept. 30, 2025, about $430 million has already been committed.

Major long-lead items and other construction materials are expected to arrive at either Thacker Pass or the fabrication yard in Winnemucca throughout the first quarter of 2026. Much of this equipment comes from countries, including Canada, China, India, the United Arab Emirates, Turkey and those in the European Union. To minimize the impact of potential tariffs on the construction supply chain, the company has structured the project so that about 75% of total capital costs, mainly labor, contractors and service-related expenses, should not be directly affected by any tariffs.

Factors Inhibiting Lithium Americas’ Prospects

LAC relies on steel and other raw materials to build Thacker Pass. Any new or increased tariffs on imported materials, or related price hikes in domestic supplies, could raise construction costs and jeopardize the LAC’s ability to complete the project within budget. Rising material costs may also reduce the viability of future projects by lowering potential returns, especially during periods of economic uncertainty. As a result, higher costs could restrict the company’s capacity to pursue otherwise attractive growth opportunities.

On Oct. 7, 2025, Lithium Americas entered into an omnibus waiver, consent and amendment (OWCA). While the OWCA enabled the first $435 million DOE Loan advance, issuing required warrants and meeting ongoing conditions introduces financial, accounting and tax uncertainties. Future loan draws depend on strict compliance with DOE requirements, and any failure could reduce available funding or trigger defaults, which could force immediate repayment and jeopardize the Thacker Pass project. The loan’s restrictive covenants also limit operational flexibility, constrain strategic decisions and may force actions unfavorable to shareholders.

Valuation & Broker Ratings for LAC Stock

LAC is trading at a forward price-to-sales (P/S) ratio of 1.42, below its peers. BHP is trading at a forward P/S ratio of 2.72, while Sigma Lithium is trading at 3.35.

  
Lithium Americas currently has an average brokerage recommendation of 2.54 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 13 brokerage firms.

Conclusion

Lithium Americas’ progress at Thacker Pass and its strong resource base support long-term prospects, but meaningful production remains years away. At the same time, high construction costs, potential tariff impacts and strict conditions tied to the DOE loan introduce considerable execution and financial risk. These constraints, along with restrictive loan covenants, could hinder future flexibility and pressure returns. 

While LAC’s valuation appears reasonable relative to peers, the moderate brokerage rating and elevated project-related uncertainties suggest a balanced risk-reward profile more suited for current shareholders than new investors. Overall, Lithium Americas appears to be a hold for existing investors rather than an attractive entry point for new investors.

LAC carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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