We recently published a list of 7 Undervalued Lithium Stocks to Invest In. In this article, we are going to take a look at where TETRA Technologies, Inc. (NYSE:TTI) stands against other undervalued lithium stocks to invest in.
Lithium is a lightweight and highly reactive metal that has become essential to modern energy storage solutions over time. It is commonly used in the form of lithium carbonate, a key component of lithium-ion batteries, which are essential for electric vehicles (EVs) and large-scale renewable energy storage. Recent innovations and cost efficiencies have enhanced EV technology, resulting in a steep increase in lithium demand. According to The Business Research Company, the global lithium market is projected to grow to $9.01 billion in 2025, up from $7.75 billion in 2024, at a compound annual growth rate (CAGR) of 16.3%. However, recent U.S. trade policies on Chinese battery components may disrupt this progress, increasing costs across the energy storage industry.
The swift advancement of clean energy technologies has been a major factor in driving the decline in battery prices. According to the World Economic Forum, lithium-ion battery prices have decreased by over 90% in the past decade, with a 40% drop witnessed in 2024 alone. Chinese manufacturers have been at the forefront of the transition to lithium-iron-phosphate (LFP) batteries, accounting for nearly half of the global EV market. These batteries are 30% cheaper than lithium nickel cobalt manganese oxide (NMC) alternatives while maintaining competitive performance.
However, despite these advancements, the lithium market is now facing policy-driven cost constraints. Moreover, U.S. President Trump increased tariffs on China by 10% in March 2025, bringing the total increase to 20% since his new term began. These decisions are in line with the Biden administration’s decision to increase tariffs on Chinese lithium batteries from 7.5% to 25%, starting January 2026. The U.S. Department of Commerce is expected to impose antidumping and countervailing duties on Chinese battery materials, with industry estimates indicating rates of approximately 150%.
These changes have created uncertainty in the energy storage industry. As per Wood Mackenzie, the U.S. energy storage installations will grow 10% annually between 2025 and 2028, which is a significant decrease from the 25% growth in 2024. A mix of tariffs and supply chain restrictions is forecast to dampen development across the sector.
In 2024, global lithium production peaked at 240,000 metric tons due to increasing demand for battery materials. These batteries, primarily for EVs, accounted for 87% of total lithium consumption in 2023, reflecting the highest reliance on lithium by the automotive sector. As EV adoption surges, this trend is anticipated to continue. According to S&P Global Mobility, global battery electric vehicle sales are expected to touch the 15.1 million units mark in 2025. This marks a 30% increase from sales figures in 2024. EVs are expected to make up 16.7% of total global light vehicle sales, reflecting the sector’s important role in sustaining lithium demand.
Looking forward, the performance of the lithium market will be driven by supply-demand dynamics and the effect of trade policies on pricing. As technological advancements are made and AI-driven optimizations continue to reduce costs, increasing tariffs and shifting supply chains could cause instability. As the sector evolves, lithium remains at the center of the global energy transition, despite the risk of market changes due to tariff-related cost pressures.
Our Methodology
To compile our list of 7 Undervalued Lithium Stocks to Invest In, we used a Finviz screener to come up with the largest lithium companies. We first shortlisted over 30 lithium stocks and then focused on the stocks trading under 15 times their forward earnings. Next, we looked at the top 7 stocks most favored by institutional investors and ranked Undervalued Lithium Stocks in ascending order based on the number of hedge funds invested in them as of Q4 2024. For hedge fund data, we used Insider Monkey’s database of over 1,000 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A technician in a jumpsuit working on a pumping system in an oil and gas well.
TETRA Technologies, Inc. (NYSE:TTI)
Number of Hedge Fund Holders: 19
Forward Price to Earnings (P/E) Ratio: 7.13
TETRA Technologies, Inc. (NYSE:TTI) provides energy-related services through its Completion Fluids & Products and Water & Flowback Services segments. The company provides clear brine fluids and additives for global oil and gas operations and produces liquid and dry calcium chloride products. It manages over 40,000 acres of brine leases in Arkansas, containing lithium carbonate equivalent resources of 234,000 tons, and markets ultra-pure zinc bromide for battery firms.
TETRA Technologies, Inc. (NYSE:TTI) achieved strong offshore and industrial chemicals performance despite weaker U.S. land activity in Q4 ended December 31, 2024. Adjusted EBITDA stood at $22.8 million, with margins increasing to 17% from 16.6% in the previous quarter. Industrial chemicals revenue jumped over 9% year-over-year to a record high, while the Completion Fluids & Products segment yielded $311 million in revenue for 2024. Water & Flowback Services witnessed headwinds from lower rig counts and decreased frac fleet activity but continued to prioritize water recycling and desalination.
Moreover, TETRA Technologies, Inc. (NYSE:TTI) increased production of its zinc bromide-based electrolyte with initial shipments to Eos Energy Enterprises. Its 2025 growth is supported by its expansion efforts in Brazil and deepwater projects in the Gulf of Mexico. To tackle rising water disposal hurdles in the Permian Basin, TETRA introduced the OASIS Total Desalination Solution (TDS).
Moving forward, TETRA Technologies, Inc. (NYSE:TTI) forecasts a pre-tax net income of between $19 million and $34 million, with adjusted EBITDA ranging from $55 million to $65 million for Q1 and Q2 2025. Lithium and bromine initiatives in Arkansas could fuel long-term growth, whereas cash flow is expected to be strengthened by a $345 million U.S. tax loss carryforward. The strategic initiatives, coupled with the company’s financial projections, rank it among the undervalued lithium stocks.
Overall, TTI ranks 4th on our list of undervalued lithium stocks to invest in. While we acknowledge the potential of TTI, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TTI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.