LAC Stock Surges 69% in 6 Months: The Lithium Bet Nobody's Talking About

Lithium Americas (LAC) just posted a monster 68.6% rally over the last six months—crushing the mining sector’s mediocre 7.7% gain and leaving competitors like BHP (up 7%) in the dust. But here’s the thing: explosive gains don’t always make for smart buys.

Why LAC’s Been Printing Money

The real driver? Thacker Pass—a lithium mine in Nevada sitting on the world’s largest known measured lithium reserve. LAC controls 62% of the joint venture (GM owns 38%), and they’re pushing hard to get Phase 1 online by late 2027, targeting 40,000 tons/year of battery-grade lithium carbonate.

Progress is legit. Engineering is 80%+ done as of Q3 2025 and tracking to hit 90% by year-end. The company’s already locked in $430M in equipment and construction commitments, with major components arriving early 2026. Smart move: they’ve structured the project so roughly 75% of capex (labor, contractors, services) dodges tariff exposure.

The Elephant in the Room

But wait—there’s a catch, or three.

Tariff Risk: Material costs could explode. Steel, rare materials, supply chain disruptions? Even with 75% tariff protection, 25% of capex is still exposed. Rising input costs could tank project economics, especially if domestic prices spike.

DOE Loan Sword of Damocles: LAC locked in a $435M DOE loan advance in October 2025, but it comes with strings attached. Strict compliance requirements, restrictive covenants, and if anything goes sideways, the company could face forced repayment or default. That’s operational handcuffs disguised as financing.

Timeline Risk: Production is years away. Meaning you’re betting on execution in an uncertain macro environment.

The Valuation Play

LAC trades at a forward P/S of 1.42—cheaper than BHP (2.72) and way below Sigma Lithium (3.35). Looks cheap on paper. But brokers are fence-sitting: average rating lands at 2.54/5 (Hold territory). That tells you pros see balanced risk-reward, not a slam dunk.

The Real Take

LAC’s got the assets and the progress to matter long-term. But it’s a hold for existing shareholders, not a buy signal for newcomers. The upside is real—but so are the execution risks, loan covenants, and geopolitical headwinds. You’re not buying a company with steady cash flow; you’re betting on a multi-year construction project to stay on budget and timeline.

Current Zacks Rank: #3 (Hold)—and that’s the honest answer.