Under the Spotlight: PLS Group ($PLS)

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Back in 2020, you could buy an entire PLS Group ($PLS) share for 15 cents. In its latest results, the lithium miner declared a five-cent dividend – equal to one-third of that old share price.

That single comparison captures one of the ASX’s wildest boom, bust and comeback stories.

The company, then known as Pilbara Minerals, became a poster child for the lithium rush as spodumene prices increased 15-fold and its shares climbed above $5 in 2022. Then new supply flooded the market, lithium prices collapsed and the $PLS share price fell around 77% from its peak to mid-2025.

Now the cycle has turned again. FY26 results show record production and a swing from a $196M net loss to a $526M net profit in the space of a year. Shares have also surged from their 2025 lows, as shareholders prepare to receive their first dividend since 2023.

But lithium remains one of the market’s most unpredictable commodities. Investors now have to decide whether PLS is becoming a bigger, more resilient lithium company or a trade on the next turn of the cycle.

Let’s put PLS Group under the spotlight.

Lithium rodeo

PLS Group’s revenue chart could almost double as a lithium price chart.

Spodumene concentrate prices soared from around US$400/t in early 2021 to around US$6,300/t by late 2022, as electric vehicle demand outstripped supply. But new mines and expanded production eventually caught up, sending prices towards US$600–US$800/t by mid-2025.

PLS rode both sides of the cycle. Revenue climbed from $1.2B in FY22 to $4.1B in FY23, then plummeted to $769M by FY25 as its realised lithium price fell.

This year, lithium prices are rallying once more and it's already showing up on the balance sheet. The miner reported $1.9B in revenue, 152% higher year on year. That flowed through to earnings, with EBITDA of $1.1B – up 1,067% from the year prior.

‘I think it’s safe to say we’re in the next part of the cycle,’ CEO Dale Henderson told Bloomberg TV following the result. ‘At this moment in time, it looks like we are in for what I think is a fantastic period, given the strong demand and languishing supply,’ Henderson said.

PLS argues lithium demand could triple by 2040 as electric vehicles and battery storage expand. Based on Benchmark Mineral Intelligence forecasts, the company sees a potential 1.6M-tonne lithium carbonate supply gap by then – roughly equal to the size of today’s market.

Ramping up production

The trick for lithium producers is to make the most of strong prices while they last.

PLS produced a record 879.5K tonnes in FY26, up 17%. Its Ngungaju plant also resumed production in July after spending almost two years idle. This adds another 200K tonnes of annual capacity, helping lift FY27 production guidance to between 1.03M and 1.10M tonnes.

Lithia recovery rose from 71.9% to a record 76.5% in FY26. In other words, PLS is extracting more of the lithium contained in its mined ore into the final concentrate. Unit operating costs fell 9% to $569/t, helped by higher volumes and plant improvements.

The operational improvements helped lift underlying EBITDA margin from 13% of revenue last year to 59% this year.

Bigger, better

P2000 is PLS Group’s biggest growth opportunity. The expansion of its key mine could lift Pilgangoora’s production capacity to 2.0M tonnes annually.

A feasibility study is due in December this year, with PLS having approved $175M of early spending. If approved, first ore production could begin by mid-2029.

The company is also trying to capture more value from its lithium before it leaves Australia. Its new midstream demonstration plant at Pilgangoora uses electric calcination to convert spodumene into lithium phosphate – an intermediate product that can be processed into battery material.

Further downstream, PLS has an 18% stake in a lithium hydroxide plant with POSCO in South Korea. In Brazil, its Colina project gives the company its first potential production base outside Australia, although a feasibility study isn’t due until late 2027.

Valuations and risks

Analysts are remarkably split on the $PLS share price.

Of the 16 brokers covering the stock on LSEG, half rate it a ‘buy’ or ‘strong buy’. The average 12-month price target is $5.22, with estimates ranging from $3.10 to $7.00.

The big unknown is what happens to lithium prices from here. Prices today remain attractive because many of the producers that flooded the market during the 2022 boom have paused operations. Tighter mining restrictions in China have added to those constraints, including the closure of CATL’s Jianxiawo lithium mine.

But some of that supply could return. Jianxiawo, which accounts for roughly 3% of projected global supply, has already obtained at least one of its safety permits and is now awaiting environmental approval to restart operations.

That illustrates the challenge of forecasting lithium. Strong prices encourage more production and more production can eventually undermine those same prices.

Is it a buy?

PLS enters the latest lithium upswing in arguably its strongest position yet.

Pilgangoora is producing record volumes at lower unit costs and Ngungaju is back online. The company also has enough cash to reward shareholders and pursue growth projects beyond its flagship mine.

The catch is that investors have already caught on. $PLS shares have more than doubled since their 2025 low, with future performance resting on lithium prices remaining attractive and new revenue streams coming through. The next stage of the story is less about how much PLS can produce and more about what that lithium will be worth.

If demand keeps outpacing supply, PLS has the scale and growth options to benefit. If idled mines restart and another wave of global supply hits the market, its earnings could turn just as quickly as they did last time.

PLS may be emerging as a bigger and more resilient miner, but for now the wild lithium ride is part of the package.

This is not financial advice nor a recommendation to invest in the securities listed. The information presented is intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.

Kylie Purcell

Senior Markets Commentator

Kylie Purcell is an investments analyst and finance journalist with over a decade of experience covering global markets, investment products and digital assets. Her commentary has been featured in publications including the Australian Financial Review, Yahoo Finance and The Motley Fool. She has a Masters Degree in International Journalism from Cardiff University and a Certificate of Securities and Managed Investments (RG146).