LAC Stock Jumped 68.6% in 6 Months: Is It Actually Worth Buying?

Lithium Americas Corp. (LAC) has been on a tear lately—up nearly 69% over the past half year, crushing the broader mining sector’s 7.7% gain. It’s even outpacing rivals like Sigma Lithium (up 58.2%) and BHP (up just 7%), so naturally everyone’s asking: should I chase this momentum or sit this one out?

What’s Fueling the Rally?

The story is straightforward: LAC is building the Thacker Pass lithium mine in Nevada—and it’s sitting on the world’s largest known lithium reserve. The setup looks solid on paper. LAC owns 62% of the project and calls the shots as operator, while General Motors holds the remaining 38%. Phase 1 is targeting 40,000 tons annually of battery-grade lithium carbonate.

Progress is real but measured. Engineering work hit 80%+ completion by late September, with mechanical construction expected to wrap by end of 2027. The company’s already committed $430 million to long-lead equipment, with major shipments (from Canada, China, India, UAE, Turkey, and EU) arriving in Q1 2026. Smart move: they’ve structured the project so ~75% of capital costs (mainly labor and services) dodge direct tariff exposure.

But Here’s Where It Gets Messy

This isn’t a clean investment story. Several headwinds could derail the whole thing:

Tariff Risk: Even with 75% protection, import-heavy materials could spike construction costs and squeeze returns.

DOE Loan Drama: LAC snagged a $435 million DOE loan advance in October 2025, but strings are very attached. Strict compliance requirements, restrictive covenants, warrant dilution—any stumble and the company faces default or forced repayment. This isn’t just financial pressure; it’s operational handcuffs.

Timeline Reality Check: Meaningful production is still years away. You’re betting on flawless execution in an uncertain macro environment.

The Valuation Play

LAC trades at 1.42x forward price-to-sales, cheaper than Sigma (3.35x) and BHP (2.72x). On paper, that looks like a bargain, but cheaper often means the market’s pricing in execution risk. Broker consensus sits at 2.54/5 (slightly above “hold”), which tracks—cautiously optimistic, not bullish.

The Verdict

If you already own LAC, holding makes sense. The resource base is world-class and the project’s progressing. But as a new entry point? The risk-reward is tilted wrong. You’re looking at 2-3 years of execution risk, tariff uncertainty, and DOE loan compliance hanging overhead—all for production that’s theoretically years out. Current valuation doesn’t adequately compensate for that complexity.

Zacks Rank: #3 (Hold). That’s analyst-speak for “we’re not sure enough to recommend buying, but we’re not worried you already own it.”