Sigma Lithium (SGML) AI Stock Analysis

• Market Cap: C$903.80M
• Dividend Yield: N/A
• Average Volume (3M): 19.37K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.18
• Revenue Growth: 11.53%
• EPS Growth: -154.63%
• Country: CA
• Employees: 589
• Sector: Basic Materials
• Sector Strength: 64
• Industry: Industrial Materials
• EPS (TTM): N/A
• Shares Outstanding: 111,856,960
• 10 Day Avg. Volume: 41,051
• 30 Day Avg. Volume: 19,367
• PEG Ratio: 0.04
• Price to Book (P/B): 12.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 169.83
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$23.36
• Price Target Upside: 189.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 51 Neutral
• Price Target: C$8.50 ▲( 5.20% Upside)

Sigma Lithium's overall score reflects a company with promising growth potential but facing significant financial and market challenges. The most significant strengths include operational efficiency and strategic flexibility, while financial leverage and technical bearish trends present risks.

Positive Factors

Asset Base

Updated 43-101 report shows a significant increase in both resource and reserve estimates, enhancing the company's asset base.

Production and Valuation

Sigma has impressively ramped up production, with 4Q24 preliminary results indicating a run-rate of 300ktpa – above the 2025 production target of 270ktpa.

Stock Rating

Analyst reiterates an outperform rating and maintains a target price of US$18, indicating confidence in the stock's potential.

Negative Factors

Financial Performance

Q4 adjusted EBITDA missed consensus estimates, primarily due to lower than expected sales prices and production volumes.

Loan Approval

Still awaiting bank guarantee for a US$100M BNDES loan, which is crucial for the next phase of development.

Price Expectations

The 2025 EBITDA falls significantly from previous expectations due to lower realized pricing and reduced Phase 2 volumes.

Sigma Lithium Business Overview & Revenue Model

Company Description

Sigma Lithium (SGML) is a leading company in the lithium mining industry, focusing on the sustainable extraction and production of high-purity lithium for the global electric vehicle (EV) and energy storage markets. The company operates primarily in Brazil, where it manages large-scale lithium deposits, leveraging advanced technologies to minimize environmental impact and enhance efficiency in its operations.

How the Company Makes Money

Sigma Lithium makes money through the extraction and sale of lithium concentrate, which is a critical raw material for the production of lithium-ion batteries. The company's revenue model is based on long-term supply agreements with manufacturers in the EV and energy storage sectors who require a consistent and reliable supply of high-quality lithium. Key revenue streams include the sale of lithium concentrate to battery manufacturers and automotive companies. Strategic partnerships with technology and automotive firms also contribute to its earnings, as these collaborations ensure a steady demand for Sigma Lithium's products. Additionally, the company's focus on sustainable mining practices and eco-friendly production processes enhances its appeal to environmentally-conscious investors and partners, further bolstering its financial performance.

Sigma Lithium Financial Statement Overview

Summary

Sigma Lithium is experiencing revenue growth but struggles with profitability, reflected in negative net profit and EBIT margins. A moderately leveraged balance sheet with significant debt reliance and negative return on equity highlights financial instability. However, turning free cash flow positive shows potential for improvement through better cash management.

Income Statement

The income statement shows a challenging financial situation for Sigma Lithium. Despite achieving revenue growth, the company experiences negative profitability with a gross profit margin of 13.24% and a net profit margin of -37.15% for TTM. The EBIT and EBITDA margins are also negative, indicating operational inefficiencies. There is a positive revenue growth rate of 6.39% from the previous year, but the company needs to address its cost management to improve its profitability.

Balance Sheet

Sigma Lithium's balance sheet reveals a moderately leveraged position with a debt-to-equity ratio of 1.68 for TTM, indicating significant reliance on debt financing. The return on equity is negative at -48.43%, reflecting the company's unprofitability. However, the equity ratio stands at 29.67%, suggesting a decent level of equity financing. Improving profitability and managing debt levels are crucial for enhancing financial stability.

Cash Flow

Cash flow analysis shows signs of improvement for Sigma Lithium. The company has turned its free cash flow positive to $10.85 million in TTM, indicating better cash management. The operating cash flow to net income ratio is -0.58, which suggests the company generates better operating cash flow relative to its net losses. The free cash flow to net income ratio is -0.15, which also shows a positive trend. Continued focus on improving cash flow generation is essential.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
192.85M	181.23M	0.00	0.00	0.00	0.00
	Gross Profit
25.54M	88.90M	-102.00K	-57.61K	-59.15K	-67.53K
	EBIT
-19.14M	-21.63M	-121.20M	-31.93M	-1.60M	-3.98M
	EBITDA
-27.97M	-4.91M	-126.68M	-31.99M	-1.57M	-3.91M
	Net Income Common Stockholders
-71.63M	-38.25M	-132.10M	-34.21M	-1.99M	-5.67M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
187.59K	64.40M	96.35M	154.31M	13.54M	103.64K
	Total Assets
196.76K	487.24M	308.91M	193.78M	33.20M	20.93M
	Total Debt
0.00	176.63M	3.67M	514.52K	5.14M	4.16M
	Net Debt
-187.59K	112.23M	-92.69M	-153.79M	-8.40M	4.06M
	Total Liabilities
23.19K	272.95M	125.80M	8.72M	11.44M	12.19M
	Stockholders Equity
173.57K	214.28M	183.11M	185.06M	21.76M	8.74M
Cash Flow		Free Cash Flow
10.85M	-76.57M	-133.09M	-22.86M	-3.77M	-3.23M
	Operating Cash Flow
41.79M	-30.79M	-5.44M	-4.26M	-2.42M	409.73K
	Investing Cash Flow
-47.80M	-82.22M	-132.53M	-18.60M	-2.38M	-4.89M
	Financing Cash Flow
65.70M	77.83M	79.79M	165.15M	17.62M	377.61K

Sigma Lithium Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.08
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SGML, the sentiment is Negative. The current price of 8.08 is below the 20-day moving average (MA) of 10.08, below the 50-day MA of 12.21, and below the 200-day MA of 15.57, indicating a bearish trend. The MACD of -1.06 indicates Positive momentum. The RSI at 33.16 is Neutral, neither overbought nor oversold. The STOCH value of 16.63 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:SGML.

Sigma Lithium Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SGML	51 Neutral	C$903.80M	―	-30.69%	―	11.53%	-154.63%
SLI	50 Neutral	C$472.64M	2.26	61.89%	―	―	-132.80%
Sector *	50 Neutral	$2.00B	-1.01	-21.27%	3.72%	2.06%	-31.33%
LAC	49 Neutral	$851.54M	―	-8.91%	―	―	―
FL	42 Neutral	C$125.41M	―	-82.26%	―	―	25.32%
LITH	41 Neutral	C$109.51M	15.23	15.03%	―	―	-7.56%
LTH	30 Underperform	C$94.11M	―	-1139.82%	―	―	60.89%

Sigma Lithium Corporate Events

Sigma Lithium Reports Strong Q1 2025 Results with Production and Cost Efficiency Gains

Sigma Lithium reported strong financial results for the first quarter of 2025, with a net income of $4.7 million and significant improvements in production and cost efficiency. The company achieved a 26% year-on-year increase in lithium concentrate production and a 17% increase in sales volumes. With production costs below target and uncommitted production, Sigma Lithium has the potential to secure financing through prepayment and offtake agreements, supporting the construction of Plant 2 and enhancing financial flexibility. These developments underscore Sigma Lithium’s strategic focus on cash generation and operational efficiency, reinforcing its long-term resilience and industry positioning.

The most recent analyst rating on (TSE:SGML) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on Sigma Lithium stock, see the TSE:SGML Stock Forecast page.

Sigma Lithium Surpasses Q1 Targets, Strengthens Community Ties in Brazil

Sigma Lithium announced a strong first quarter in 2025, surpassing production targets with a 26% increase over the previous year and achieving a 24% EBITDA margin. The company has received significant community and governmental support in Brazil, contributing to regional prosperity through job creation and social programs.

Sigma Lithium to Announce Q1 2025 Results, Maintains Strong Production

Sigma Lithium announced it will release its first quarter 2025 financial results on May 14, 2025, after market close, with a conference call scheduled for the following day. The company maintained its production target of over 68,000 tonnes in the first quarter, underscoring its operational strength and positioning as a major player in the lithium industry.

Sigma Lithium Achieves 1Q25 Production Target, Maintains Strong Cash Flow

Sigma Lithium announced it has achieved its first-quarter 2025 production target, delivering 68,000 tonnes of Quintuple Zero Green Lithium, maintaining cash generation and costs in line with guidance. The company has successfully shipped and sold a total of 76,000 tonnes to International Resource Holdings, indicating strong demand and stable cash flow, which supports its resilience in the current lithium price environment.

Sigma Lithium Reports Strong 2024 Results and Plans for Expansion

Sigma Lithium reported strong financial results for the fourth quarter and full year of 2024, highlighted by robust operating margins and record production levels. The company achieved significant cost reductions and strengthened its commercial strategy to align with market trends. With the construction of a second Greentech Industrial Plant underway, Sigma Lithium is poised to double its production capacity by 2025, positioning itself for sustainable long-term growth in the lithium industry.

Sigma Lithium Strengthens Board with Strategic Appointment Amid Expansion

Sigma Lithium has appointed Junaid Jafar, Chief Investment Officer at Al Muhaidib Investment Office, as a new independent board member. This strategic move is expected to enhance the company’s board with Jafar’s extensive experience in capital allocation and investment management, particularly in the Middle East. His appointment comes at a pivotal time as Sigma Lithium is expanding its production capacity and planning new industrial facilities to meet increasing lithium demand. The company is also focused on expanding its global commercial presence and forming strategic partnerships, aligning with its growth strategy and commitment to sustainable development.