Technology
Stardust Power, Inc.
Enabling the Lithium “Gold Rush” of the 21st Century.
- Stardust Power represents a new breed of clean process based lithium producers in the U.S., set to challenge the entrenched near-monopoly of mining companies in China and other overseas markets like Chile. Note: the company processes and refines lithium; it does not mine or extract it.
- The company is in the process of going public through aSPAC merger with Global Partner Acquisition Corp. II (Nasdaq:GPAC) and will trade under the Nasdaq ticker symbol SDST
- With demand for lithium continuing to accelerate, we believe that developed nations in America and the EU will gradually be shifting their demand to environmentally-friendly suppliers.
- Stardust Power is set to deliver multiple benefits to domestic customers as an eco-friendly U.S.-based producer: Significant savings in overseas shipping and logistics costs, environmental compliance, and a greatly simplified domestic supply chain.
- Stardust Power is poised to become one of the major suppliers of battery-grade lithium in the U.S., as it completes its central lithium refinery plant in Muskogee, Oklahoma, capable of producing 50,000 tons of battery-grade lithium annually with a plan to scale up production over time. The total cost of the project will be ~$1.2 billion, with the first phase (getting the company to 25,000 tons per year) costing ~$650 million. Management expects that up to 80% of the total could be secured through project finance, with the balance via sponsor equity including potential government grants.
- The plant currently being constructed will be strategically located near multiple U.S.battery manufacturers, and will have favorable access to multiple U.S. brine resources.
- The company has secured up to $257 million in incentives from the State of Oklahoma, and is in the process of securing federal grant and loan programs.
- We expect that the Muskogee plant will go online in 2026, and that Stardust Power will be shipping 25,000 tons of battery grade lithium per year staring in 2H’26, scaling up to50,000 tons in 2027. Assuming that run rate, and given current lithium carbonate pricing in the range of $23 - $25K/ton, we are modeling Stardust Power’s revenue to be $75.9M in 2027 and $483M in 2028, growing over 500% y/y on accelerating demand for domestically produced, battery-grade lithium.
- Additionally, we believe that the company can generate $203M in EBITDA in 2028 after the Muskogee plant is fully operational, with EBITDA margins expanding to 42% in 2028.
- Our $19 price target assumes a reasonable, peer-group average valuation of 3.3x on an EV/Revenue basis, discounting our 2028 YE revenue estimate to the current year using an annual discount rate/WACC of 15%. Our price target assumes full share conversion and a share count of 48 million shares.
