The PLS Group Ltd (ASX: PLS) share price has gone through a 55% decline over the last six months, as the chart below shows. It's now significantly cheaper, but is it better value?
This business owns 100% of the world's largest independent hard-rock lithium operation, the Pilgangoora operation in Australia. It also owns the Colina lithium project in Brazil. Additionally, the company is involved in the lithium value chain through its joint venture with POSCO in South Korea.
It's partly understandable why the PLS Group share price has declined recently, given that lithium prices have dropped recently.
A large drop in revenue
In its FY27 first-quarter update, reported on 28 October 2026 and covering the three months to September 2026, the company revealed a 24% quarter-over-quarter drop in its revenue to A$563 million. Part of that decline was due to an 11% drop in sales to 223.6kt, though production volume increased by 25% to 267.6kt.
In that quarterly update, the realised price for its lithium dropped 14% quarter-over-quarter to US$1,809 per tonne. On a monthly basis, that could have a sizeable impact on the company's monthly profitability.
As a miner, its production costs don't change much month to month. So, a rise in revenue per tonne can add significantly to its earnings as that extra revenue is largely additional pure profit. But the opposite effect happens when the commodity prices fall – that decline in revenue mostly cuts into the profit dollars.
The company reported that its cash margin from operations fell 32% quarter over quarter to $392 million. While that's a large decline, making $400 million in a quarter is still a great performance.
One of the factors that helped the company maintain as much profitability as it did was the 12% decline it achieved in its unit operating cost per tonne to A$539 million. It said this decline was underpinned by operational efficiencies and a greater volume of capitalised waste.
What could happen to the PLS Group share price from here?
Expert analysts are now very bullish about the ASX lithium share for the year ahead.
According to CMC Invest, there have been 13 broker analyst ratings on the business within the last three months. Of those 13, 10 were buy ratings, 1 was a hold rating, and 2 were sell ratings.
Of those 13 ratings, the average price target is $4.23. That means those analysts collectively believe the PLS Group share price could rise by 48% within the next year. That would be a strong return if it rose by that much in the year ahead.
It looks like one to watch amid a long-term trend towards electrification worldwide. A 48% rise could happen, particularly if the lithium price were to start rising again. I think it's better value, and I'd be willing to make the investment.
The post How much could the PLS Group share price rise in the next 12 months? appeared first on The Motley Fool Australia.
Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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