BID TerminalOpen complete report
Research library Industrials & Energy

Back of Napkin

Sigma Lithium Corporation SGML

Three-pass checkedFresh as companies report

The bet you're really making is that the price of lithium climbs back up, and that this Brazilian miner keeps digging hard rock spodumene out of the ground and selling it as lithium concentrate to battery makers. You're betting Sigma finishes building its planned second and third plants, roughly tripling how much it can sell, before its stretched finances force it to raise money on bad terms. Right now it just turned its first profit in years: record revenue of $55 million last quarter, the fattest margins in its history, on a selling price that jumped 17%. You pay about 17 times the value of everything Sigma owns, the middle of its decade, and under four times what the single analyst covering it thinks it will earn in 2028.

Key data

Price$12.39
52-week range$4.62 to $24.48
P/E, trailing / FY28Eneg / 3.8x
EV/EBITDA, trailing38.8x

SGML · price with moving averages

Daily · 6MWeekly · 3Y
$2$11$20$29$38 Sep '23Apr '24Nov '24Jul '25Feb '26Sep '26 BID
EMAs82140

Source: market data.

The business

Sigma Lithium digs hard rock out of the Jequitinhonha Valley in Brazil and turns it into lithium concentrate, the ore that gets refined into the metal inside electric-car and grid-storage batteries. Its one plant, running since April 2023, is built to make 270,000 tonnes a year using a water-and-gravity dense medium separation process with no chemicals, which the company sells as green lithium. The product is bagged and shipped into a global market where the price is set by supply and demand in China, not by Sigma. That is the whole vulnerability: Sigma is a price-taker whose only durable edge is being one of the cheapest producers alive, cheap enough to stay open when the price falls and higher-cost rivals shut. Everything else, the expansion, the record margins, the green label, rides on that one fact. Anyone who watched lithium in 2018 knows how the second act of this movie tends to go.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05Closing thoughts
  6. 06Methodology

Continue with SGML

Get the complete Back of Napkin free.

Choose this as your free complete report. No card required.

Read the complete report

More company research

View all research
Devon Energy Corporation DVNThe bet you're really making is that Devon keeps pulling oil out of West Texas cheaply enough to make money at prices well below today's. You're betting the company it bought this spring makes the average barrel cheaper, not just adds more of them. Right now it is going well: the largest sales quarter in the company's history, roughly double the one before as the merger landed, with profit swinging back hard after a weak start to the year. You pay about 11 times the past year's earnings and roughly 8 times what the combined company now earns in a year, toward the top of what the stock has fetched over the last five years. Back of Napkin SolarEdge Technologies, Inc. SEDGThe bet you're really making is that people in Europe and America keep putting solar panels on their roofs, and keep buying SolarEdge's box that turns that sunlight into power the house can use. You're betting the mountain of unsold inverters that piled up in European warehouses, the thing that nearly killed the company, is finally gone, so what SolarEdge ships now matches what people actually install. Right now it is turning: revenue grew 20% from a year ago, and for every dollar of product it keeps 28 cents after building it, up from 11 cents, though it still loses money overall. You pay about 19 times the profit analysts pencil in for 2028, two years out with no profit before then, about the middle of what the stock cost in its normal years before the pandemic. Back of Napkin Plug Power Inc. PLUGThe bet you're really making is that Plug Power can build a green-hydrogen business, fuel cells for the forklifts in giant warehouses and the hydrogen to run them, faster than it burns through its cash. You're betting it stops losing money on the things it sells before the money runs out, because for a decade it sold that gear for less than it cost to make. Right now it is finally close on that one line: last quarter it came within a whisker of breaking even on the cost of what it sold, the best in years, though it still lost $188 million overall and its cash keeps draining. You pay about 4 times yearly sales for a company that has never turned a full-year profit in its 29 years and holds only $162 million in cash against losses that size. Back of Napkin PG&E Corporation PCGThe bet you're really making is that PG&E keeps burying and rebuilding thousands of miles of power line across northern California, and that California keeps letting it charge customers enough to earn a steady profit on all that spending. You're betting it gets through the dry summers without its equipment starting another deadly fire. Right now it is going well: first-half revenue up 8%, profit per share climbing about 10% a year, and a capital program underway that management has described as targeting roughly $12 billion for 2026. You pay about 10 times last year's earnings and 1.1 times book value, half what a safer utility costs and near the low end of its own decade, because a fire it starts could still bankrupt it again. Back of Napkin