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Lithium Americas Corp LAC

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Stock XNYS Rating as of
$3.39 +0.03 (0.89%)
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As of Delayed Price Closed
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Company Report

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Lithium Americas: Short-Seller Report Alleges Lithium Project Is Uneconomical

Seth Goldstein

On May 23, a short-seller released a report asserting that Lithium Americas' Thacker Pass project is uneconomic and shares are likely to be further diluted. After reviewing the report, we see no reason to change our $12 (CAD 16) fair value estimate for no-moat Lithium Americas. The stock plunged over 6% on the day as the market reacted negatively to the report. At current prices, we view shares as materially undervalued, with the stock trading well below our fair value estimates.

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Price vs Fair Value

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LAC is trading at a 327% premium.
Price
$3.39
Fair Value
$43.00
Uncertainty
Very High
1-Star Price
$55.00
5-Star Price
$9.00
Economic Moat
Xcc
Capital Allocation
Ntwmxxzkm

Bulls Say, Bears Say

Bulls

As a lithium pure play, Lithium Americas is well positioned to increase profits from EV growth through lithium batteries.

Bears

Thacker Pass is a new greenfield lithium project that will likely face delays and cost overruns, similar to other greenfield projects in the industry.

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Trading Information

Previous Close Price
$3.36
Day Range
$3.31–3.46
52-Week Range
$3.30–12.38
Bid/Ask
$3.40 / $3.44
Market Cap
$736.21 Mil
Volume/Avg
3.0 Mil / 5.5 Mil

Key Statistics

Price/Earnings (Normalized)
—
Price/Sales
—
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Lithium Americas is a pure-play lithium producer. The firm owns one resource, Thacker Pass, that is located in northwest Nevada. Thacker Pass recently began construction and is expected to begin production in the mid- to late 2020s. Thacker Pass is one of the largest known lithium resources in the world. The project would be the first clay-based asset to enter production, and we estimate it will be in bottom half of the global cost curve. Management plans to develop Thacker Pass into a fully integrated lithium production site, with downstream refining capabilities on site, and will sell into the lithium chemical market.
Sector
Basic Materials
Industry
Other Industrial Metals & Mining
Stock Style Box
—
Total Number of Employees
—
Website
https://www.lithiumamericas.com

Competitors

Valuation

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Metric
LAC
LAAC
ALTM
Price/Earnings (Normalized)
 ——5.47
Price/Book Value
 1.350.891.10
Price/Sales
 ——2.42
Price/Cash Flow
 —0.605.19
Price/Earnings
LAC
LAAC
ALTM

Financial Strength

Metric
LAC
LAAC
ALTM
Quick Ratio
 8.140.461.90
Current Ratio
 8.380.463.46
Interest Coverage
 −21.850.11—
Quick Ratio
LAC
LAAC
ALTM

Profitability

Metric
LAC
LAAC
ALTM
Return on Assets (Normalized)
 −4.21%−0.26%18.77%
Return on Equity (Normalized)
 −3.79%−0.33%26.41%
Return on Invested Capital (Normalized)
 −6.16%−1.86%22.73%
Return on Assets
LAC
LAAC
ALTM
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