Almonty Shares Face Reality Check Following Meteoric Rise

A sharp pullback is testing the recent breakout in Almonty Industries Inc. shares. The stock is retreating from record highs after a blistering one-week rally of over 28%, prompting investors to question whether the company's fundamentals can justify its rapid revaluation. This consolidation phase follows ambitious growth plans unveiled by the CEO and a significant expansion in market capitalization.

The investment thesis for Almonty is deeply tied to the global tungsten market. Supply constraints have become a major catalyst, with China controlling more than 80% of worldwide production. Recent Chinese restrictions on exports and a ban on so-called dual-use shipments, coupled with a forthcoming U.S. prohibition (effective 2027) on using Chinese-origin tungsten in defense procurement, have dramatically tightened supply.

These geopolitical shifts propelled tungsten prices upward by more than 160% in 2025, with gains continuing into early 2026. Almonty is positioning itself as the largest Western-oriented tungsten producer and the only currently producing tungsten company with a operational footprint in the United States, capitalizing on this supply chain restructuring.

Revenue Visibility from Defense Contracts

A key element of the company's stability is its portfolio of binding offtake agreements, which include long-term contracts to supply tungsten oxide for U.S. defense applications. These contracts feature price floors, providing crucial revenue visibility and underscoring the strategic, non-cyclical nature of demand for its output.

A Stellar Rally Meets a Sharp Correction

The catalyst for the recent surge was a shareholder letter from CEO Lewis Black outlining extensive expansion plans, which drove the stock to new all-time highs. Key announcements included:
* The Sangdong Mine in South Korea progressing toward full Phase-1 commercialization.
* A target production rate of 460,000 metric tonne units (MTU) annually upon Phase 2 completion, expected in 2027.
* A capital raise of $129.4 million in December 2025 via an upsized placement.

Following a 28.25% gain in the week ending January 25, the momentum reversed. On Tuesday, the equity declined 7.8% on the NASDAQ, falling from $11.58 to $10.68, with an intraday low of $10.63. Trading volume of approximately 1.84 million shares was about 59% below the average daily volume of 4.47 million, indicating a pause in the fervent buying activity.

Divergent Analyst Views Highlight Valuation Concerns

Wall Street's assessment of the stock is mixed, reflecting debate over its current price level:
* Oppenheimer raised its price target from $7 to $12, maintaining an "outperform" rating.
* DA Davidson reiterated a "buy" rating with a $12 target.
* Weiss Ratings maintained its "sell" recommendation.
* Wall Street Zen upgraded its view from "sell" to "hold."

Should investors sell immediately? Or is it worth buying Almonty?

The consensus translates to a "Moderate Buy" rating, but the average price target of $10.17 sits below the post-rally trading level. This suggests a portion of the analyst community views the present valuation as rich.

Financial Metrics Reveal a High-Risk, High-Reward Profile

Despite the compelling strategic narrative, several financial ratios warrant caution. The company carries a market capitalization of approximately 3.86 billion CAD (roughly 2.7 billion USD) and a negative price-to-earnings ratio of -48.08.

Liquidity metrics appear constrained:
* Quick Ratio: 0.63
* Current Ratio: 0.77

Both figures point to relatively tight short-term liquidity. Furthermore, the balance sheet shows significant leverage, with a Debt-to-Equity Ratio of 16.37. This high financial leverage increases the risk profile associated with funding its ambitious growth pipeline.

Building a Global Tungsten Platform

Almonty is actively working to diversify its geographic footprint and reduce reliance on any single asset through a multi-project strategy:
* Panasqueira Mine, Portugal: A major drilling program aims to access "Level 4," with a potential annual output of up to 124,000 MTU.
* Gentung Browns Lake, Montana: Targeting production readiness for the second half of 2026, with a possible annual capacity of 140,000 MTU.
* Sangdong Molybdenum Project: Reserve definition and development planning are advancing.

The overarching corporate strategy aims to supply at least 40% of non-Chinese tungsten through an integrated, Western-based platform spanning North America, Europe, and Asia. The transition from builder to producer was marked by the commencement of active mining at Sangdong in December 2025.

The stock's extraordinary 840% gain in 2025 embodied intense investor enthusiasm for critical minerals. The current pullback represents a practical test of whether the company's project execution, secured defense contracts, and financial resilience can ultimately support that dramatic valuation.