Is Core Lithium stock a good long-term investment?

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.

Is Core Lithium Ltd (ASX: CXO) stock a good long-term investment at current pricing? Good question.

This ASX lithium share certainly hasn’t been a good investment up until now, at least for anyone who bought shares from 2021 onwards.

Today, Core Lithium stock has gained a rosy 7.14%, and is up to 15 cents a share. But that still leaves the company down a nasty 45.6% year to date alone. Over the past 12 months, investors have lost an even worse 83.9%. And Core Lithium has tanked an awful 91% from its 2022 all-time high of around $1.70 a share.

You’d have to go back to late 2020 to find the last time Core Lithium was exploring the same share price territory as it is today.

Check all of that out for yourself below:

But could this share price weakness make Core Lithium stock a buy today? After all, a substantial share price sell-off can often be a great time to ‘buy the dip’.

Is Core Lithium stock a buy today for long-term investors?

I would argue ‘no’. Companies go through share price dips all the time and for any number of different reasons. Some are temporary and prove to be good buying opportunities in hindsight. Others reflect structural challenges in a company and are just tracking said company’s decline in intrinsic value. I believe Core Lithium stock falls into the latter category.

For one, this is not a company that is currently financially sound in my view. Due to tanking lithium prices, Core Lithium was forced to halt lithium production at what was its flagship Finniss project earlier this year.

In March, Core Lithium also revealed that it brought in $134.8 million in revenue over the six months to 31 December, which resulted in Core posting a net loss after tax of $167.6 million. It wasn’t a great look to have its CEO Gareth Manderson leave the company around the same time.

Earlier this month, my Fool colleague Mitchell described the results as follows: “the Finniss Lithium Project operator lost $1.24 for every $1 product sold. Such figures are simply not sustainable in the long run”.

I agree wholeheartedly.

So no, I see no reason to recommend Core Lithium stock as a long-term investment today. There is simply too much uncertainty over the company’s future right now to regard Core shares as a solid investment, despite the apparently cheap share price today.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.