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A Look At SQM (NYSE:SQM) Valuation As Lithium Weakness Meets Stabilizing Share Price

Simply Wall St · 4d ago

Sociedad Química y Minera de Chile (NYSE:SQM) has caught investors’ attention as its share price shows signs of stabilizing despite weak lithium markets, putting fresh focus on its cost position and diversified revenue base.

See our latest analysis for Sociedad Química y Minera de Chile.

The recent 1 month share price return of 21.66% and 3 month share price return of 67.33% suggests momentum has picked up. The 1 year total shareholder return of 89.79% contrasts with a flat 3 year total shareholder return and a more moderate 5 year total shareholder return of 42.46%.

If SQM’s rebound has your attention, it could be a good moment to see what else is moving and check out fast growing stocks with high insider ownership.

With SQM trading at $74.53 and an internal intrinsic value estimate suggesting roughly a 25% discount, investors face a key question: is this a genuine mispricing, or is the market already accounting for future growth?

Most Popular Narrative: 21.3% Overvalued

Compared with the last close of $74.53, the most followed narrative sees fair value closer to $61.44, framing SQM as pricing in a rich outlook.

Expansion of lithium production capacity in Australia (Mt. Holland and Kwinana refinery reaching full capacity) and Chile, along with investments in new projects like Salar Futuro, supports long-term volume growth and higher revenue potential for SQM over the next several years.

Read the complete narrative.

Curious what kind of revenue curve and margin profile need to line up for that fair value? The narrative leans on compounding growth, rising profitability, and a future earnings multiple that sits below many peers yet still supports a premium to its own modeled cash flows. Want to see which specific growth and profit assumptions are doing the heavy lifting?

Result: Fair Value of $61.44 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on lithium markets and the eventual Codelco partnership terms, where tougher royalties, regulation or weaker demand could quickly challenge those optimistic assumptions.

Find out about the key risks to this Sociedad Química y Minera de Chile narrative.

Another View: SWS DCF Points to Undervaluation

While the popular narrative tags Sociedad Química y Minera de Chile as about 21.3% overvalued at a fair value of US$61.44, our DCF model lands in a very different place, with a fair value estimate of US$99.65 and the shares trading at roughly a 25.2% discount. That kind of gap raises a simple question for you as an investor: are expectations too optimistic in the narrative, or too cautious in the cash flow model?

Look into how the SWS DCF model arrives at its fair value.

SQM Discounted Cash Flow as at Jan 2026
SQM Discounted Cash Flow as at Jan 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Sociedad Química y Minera de Chile for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 874 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Sociedad Química y Minera de Chile Narrative

If you see things differently or simply prefer to test your own assumptions against the numbers, you can build a full SQM narrative in just a few minutes, starting with Do it your way.

A great starting point for your Sociedad Química y Minera de Chile research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If SQM is on your radar, do not stop there. The next step is to widen your watchlist with other focused ideas that match your style.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.