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Should You Buy, Sell or Hold MP Stock Post Q2 Earnings Beat?
Read MoreHide Full Article
Key Takeaways
MP Materials Q2 revenues jumped 84% to $57.4M, topping the Zacks Consensus Estimate.
NdPr production hit 597 metric tons, with sales volumes up 226% year over year.
Landmark Apple and DoD deals strengthen MPs domestic rare earth supply chain.
MP Materials (MP - Free Report) reported second-quarter 2025 results on Aug. 7, with revenues surging 84% year over year to $57 million, surpassing the Zacks Consensus Estimate. The company achieved record neodymium and praseodymium (NdPr) production and sales volumes more than tripled year over year. The company also logged the second-highest quarterly output of rare earth oxides (REO).
MP Materials reported a loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 17 cents and the year-ago quarter’s loss of 17 cents. Following the earnings release, MP shares have gained 8%.
MP Stock Outperforms Peers, Industry & Market
MP Materials shares have moved up 367% year to date, outperforming the Zacks Mining - Miscellaneous industry’s growth of 17.9%. In comparison, the Zacks Basic Materials sector has gained 13.4%, while the S&P 500 has moved up 8.5%.
MP’s YTD Price Performance Against Industry, Sector & S&P 500
Image Source: Zacks Investment Research
MP Materials has outperformed other names in the rare earths space like Idaho Strategic Resources (IDR - Free Report) , Lynas Rare Earths Limited (LYSDY - Free Report) , and Energy Fuels (UUUU - Free Report) , which have advanced 143.8%, 115.2%, and 87.4%, respectively, in the same timeframe.
MP’s YTD Price Performance vs. IDR, LYSDY & UUUU
Image Source: Zacks Investment Research
Before addressing the critical question of how investors should position themselves regarding the stock, let us first review the company’s second-quarter results.
MP Materials’ Q2 Highlights: Solid Production Numbers
MP Materials reported NdPr production of 597 metric tons in the quarter, a 119% surge from the year-ago quarter. NdPr sales volumes soared 226% to 443 metric tons, attributed to the shift to production of midstream products, mainly NdPr oxide.
The Materials segment’s revenues increased 20% to $37.5 million on higher sales volumes and realized pricing.
REO production increased 45% to 13,145 metric tons on higher recoveries from the continued implementation of Upstream 60K optimizations. Amid the ramp-up in midstream operations, most of the REO output was directed toward producing separated rare earth products instead of selling it as rare earth concentrate. Coupled with the strategic move to halt concentrated shipments to China, the company reported a 54% drop in REO sales volumes to 2,658 metric tons.
The Magnetics segment, meanwhile, continues to ramp up commercial metal deliveries and generated revenues of $19.9 million in the second quarter.
MP Material’s total revenues surged 84% year over year to $57.4 million, beating the Zacks Consensus Estimate of $47 million.
Cost of sales went up 21.6% due to higher production costs. Selling, general and administrative expenses were up 28% due to higher legal costs and increased employee headcount to support downstream expansion. Adjusted EBITDA was a loss of $12.5 million compared with a loss of $27.1 million in the year-ago quarter.
Despite higher revenues, the company reported an adjusted loss of 13 cents per share due to the higher cost of sales and selling, general and administrative expenses.
Notably, the company’s strategy of producing and selling more separated products at Mountain Pass and the ramp-up of output of magnetic precursor products are expected to lead to higher costs this year.
Landmark Partnerships Fuel MP’s Growth Prospects
In July, MP Materials announced a landmark long-term agreement to supply Apple with rare earth magnets manufactured in the United States, entirely from recycled materials. Apple and MP Materials have collaborated over the past five years to develop advanced recycling technology that enables recycled rare earth magnets to be processed into material that meets Apple’s rigorous standards.
Also, in July, MP Materials entered into a public-private partnership with the United States Department of Defense (DoD) that will fast track the development of a domestic rare earth magnet supply chain.
Projections for MP Materials Suggest Solid Growth Potential
The Zacks Consensus Estimate for MP Materials’ revenues is projected to grow 32.1% year over year in 2025, and a further 128.9% in 2026.
Image Source: Zacks Investment Research
The consensus estimate for 2025 earnings is currently pegged at a loss of 35 cents per share. The consensus estimate for earnings of 97 cents per share for 2026 implies a potential turnaround.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP’s fiscal 2025 and 2026 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
MP Materials Stock Trades at a Premium
MP Materials stock is trading at a forward 12-month price/sales multiple of 24.61X, a significant premium to the industry’s 1.15X.
Image Source: Zacks Investment Research
Meanwhile, Idaho Strategic Resources, Lynas and Energy Fuels are trading lower at 11.21X, 13.67X and 22.78X, respectively.
Image Source: Zacks Investment Research
MP Materials Poised Well in the Long Run
MP Materials operates the Mountain Pass Rare Earth Mine and Processing Facility, the only rare earth mining and processing site of scale in North America. These materials are essential for a wide range of existing and emerging clean-tech technologies, such as electric vehicles, wind turbines, robotics, drones and defense systems. With China dominating the global supply, the US is increasingly prioritizing the development of domestic rare earth capabilities.
The multibillion-dollar investment package and long-term commitments from DoD provide MP Materials the opportunity to capitalize on this. MP will construct the second domestic magnet manufacturing facility (the 10X Facility), which will take total U.S. rare earth magnet manufacturing capacity to 10,000 metric tons and cater to both the defense and commercial sectors. Also, the $500 million agreement with Apple marks a transformative step for MP, launching its recycling platform and scaling up its magnet production business.
Should You Buy MP Stock Right Now?
MP Materials’ unmatched positioning in the U.S. supply chain, efforts to ramp up operations and premium partnerships with Apple and the DoD indicate a robust growth runway. While the stock trades at a premium valuation, its sector dominance and solid earnings growth potential in 2026 make it an attractive stock for investors to benefit from the solid long-term fundamentals of rare earth products.
Image: Shutterstock
Should You Buy, Sell or Hold MP Stock Post Q2 Earnings Beat?
Key Takeaways
MP Materials (MP - Free Report) reported second-quarter 2025 results on Aug. 7, with revenues surging 84% year over year to $57 million, surpassing the Zacks Consensus Estimate. The company achieved record neodymium and praseodymium (NdPr) production and sales volumes more than tripled year over year. The company also logged the second-highest quarterly output of rare earth oxides (REO).
MP Materials reported a loss of 13 cents per share, narrower than the Zacks Consensus Estimate of a loss of 17 cents and the year-ago quarter’s loss of 17 cents. Following the earnings release, MP shares have gained 8%.
MP Stock Outperforms Peers, Industry & Market
MP Materials shares have moved up 367% year to date, outperforming the Zacks Mining - Miscellaneous industry’s growth of 17.9%. In comparison, the Zacks Basic Materials sector has gained 13.4%, while the S&P 500 has moved up 8.5%.
MP’s YTD Price Performance Against Industry, Sector & S&P 500
Image Source: Zacks Investment Research
MP Materials has outperformed other names in the rare earths space like Idaho Strategic Resources (IDR - Free Report) , Lynas Rare Earths Limited (LYSDY - Free Report) , and Energy Fuels (UUUU - Free Report) , which have advanced 143.8%, 115.2%, and 87.4%, respectively, in the same timeframe.
MP’s YTD Price Performance vs. IDR, LYSDY & UUUU
Image Source: Zacks Investment Research
Before addressing the critical question of how investors should position themselves regarding the stock, let us first review the company’s second-quarter results.
MP Materials’ Q2 Highlights: Solid Production Numbers
MP Materials reported NdPr production of 597 metric tons in the quarter, a 119% surge from the year-ago quarter. NdPr sales volumes soared 226% to 443 metric tons, attributed to the shift to production of midstream products, mainly NdPr oxide.
The Materials segment’s revenues increased 20% to $37.5 million on higher sales volumes and realized pricing.
REO production increased 45% to 13,145 metric tons on higher recoveries from the continued implementation of Upstream 60K optimizations.
Amid the ramp-up in midstream operations, most of the REO output was directed toward producing separated rare earth products instead of selling it as rare earth concentrate. Coupled with the strategic move to halt concentrated shipments to China, the company reported a 54% drop in REO sales volumes to 2,658 metric tons.
The Magnetics segment, meanwhile, continues to ramp up commercial metal deliveries and generated revenues of $19.9 million in the second quarter.
MP Material’s total revenues surged 84% year over year to $57.4 million, beating the Zacks Consensus Estimate of $47 million.
Cost of sales went up 21.6% due to higher production costs. Selling, general and administrative expenses were up 28% due to higher legal costs and increased employee headcount to support downstream expansion. Adjusted EBITDA was a loss of $12.5 million compared with a loss of $27.1 million in the year-ago quarter.
Despite higher revenues, the company reported an adjusted loss of 13 cents per share due to the higher cost of sales and selling, general and administrative expenses.
Notably, the company’s strategy of producing and selling more separated products at Mountain Pass and the ramp-up of output of magnetic precursor products are expected to lead to higher costs this year.
Landmark Partnerships Fuel MP’s Growth Prospects
In July, MP Materials announced a landmark long-term agreement to supply Apple with rare earth magnets manufactured in the United States, entirely from recycled materials. Apple and MP Materials have collaborated over the past five years to develop advanced recycling technology that enables recycled rare earth magnets to be processed into material that meets Apple’s rigorous standards.
Also, in July, MP Materials entered into a public-private partnership with the United States Department of Defense (DoD) that will fast track the development of a domestic rare earth magnet supply chain.
Projections for MP Materials Suggest Solid Growth Potential
The Zacks Consensus Estimate for MP Materials’ revenues is projected to grow 32.1% year over year in 2025, and a further 128.9% in 2026.
Image Source: Zacks Investment Research
The consensus estimate for 2025 earnings is currently pegged at a loss of 35 cents per share. The consensus estimate for earnings of 97 cents per share for 2026 implies a potential turnaround.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP’s fiscal 2025 and 2026 earnings has moved north over the past 60 days.
Image Source: Zacks Investment Research
MP Materials Stock Trades at a Premium
MP Materials stock is trading at a forward 12-month price/sales multiple of 24.61X, a significant premium to the industry’s 1.15X.
Image Source: Zacks Investment Research
Meanwhile, Idaho Strategic Resources, Lynas and Energy Fuels are trading lower at 11.21X, 13.67X and 22.78X, respectively.
Image Source: Zacks Investment Research
MP Materials Poised Well in the Long Run
MP Materials operates the Mountain Pass Rare Earth Mine and Processing Facility, the only rare earth mining and processing site of scale in North America. These materials are essential for a wide range of existing and emerging clean-tech technologies, such as electric vehicles, wind turbines, robotics, drones and defense systems. With China dominating the global supply, the US is increasingly prioritizing the development of domestic rare earth capabilities.
The multibillion-dollar investment package and long-term commitments from DoD provide MP Materials the opportunity to capitalize on this. MP will construct the second domestic magnet manufacturing facility (the 10X Facility), which will take total U.S. rare earth magnet manufacturing capacity to 10,000 metric tons and cater to both the defense and commercial sectors. Also, the $500 million agreement with Apple marks a transformative step for MP, launching its recycling platform and scaling up its magnet production business.
Should You Buy MP Stock Right Now?
MP Materials’ unmatched positioning in the U.S. supply chain, efforts to ramp up operations and premium partnerships with Apple and the DoD indicate a robust growth runway. While the stock trades at a premium valuation, its sector dominance and solid earnings growth potential in 2026 make it an attractive stock for investors to benefit from the solid long-term fundamentals of rare earth products.
MP Materials currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.