10 Most Shorted Stocks That Are Loved by Analysts

6. Sigma Lithium Corporation (NASDAQ:SGML)

Short Interest Percentage: 25.53%

Average Share Price Target: $37.36

Share Price Upside: 204.98%

Sigma Lithium Corporation (NASDAQ:SGML) is a Canadian lithium mining company with operations in Brazil. It is a loss making stock that reported its first revenue in several years in 2023 by bringing in C$181 million in sales. This naturally raises the stakes for Sigma Lithium Corporation (NASDAQ:SGML), as short sellers are eager to pounce on any weakness in the stock in case its revenue growth slows down. While initially analysts had expected the firm to breakeven and post a profit of C$82 million in 2025, which left plenty of room for a share price drop this year in case of slowing growth, May 2024 came with a significant downward revision for the year’s revenue but a new profitability estimate. This saw analysts cut their 2024 revenue guidance to C$354 million from $605 million, but also C$0.61 in earnings per share. While it marked a downward revision for the revenue, the earlier EPS estimate was C$0.42.

Sigma Lithium Corporation (NASDAQ:SGML) has also had a troubled history with management shakeups spooking investors. Its fate is tied to lithium production, and its shares soared by 11% in the first week of April after it shared plans of a $100 million investment in Brazil to increase output to 520,000 metric tons in 2025 from an earlier estimate of 270,000. Another key factor for the stock is the firm’s ability to manage lithium pricing. Its CEO commented on this trend during the latest earnings call where she shared:

We are extremely enthusiastic about our prospects as we have been advancing towards key catalysts of our plan to double production capacity by 2025. The four key deliveries of this quarter were fast, the delivery of an increased premium pricing where we achieved a fixed floating formula of 9% of the London Metals Exchange Lithium equivalent, basically reaching a $1,290 pricing. That represents an 11% increase to the April 24, realized pricing up the numbers we released for the first quarter of 2024. So that clearly demonstrates that the pricing trend is upwards.

An 11% increase from previous months and an overall almost 30% increase from the average pricing of the previous quarter.