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Is MP Stock a Buy, Hold, or Sell After Its 146.3% Three-Month Rally?
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Key Takeaways
MP Materials stock has soared 146.3% in three months, outpacing industry and market gains.
Apple supply deal and DoD partnership boosted MP's rally and growth prospects.
Q2 output surged 119% for neodymium, with revenues up 84% year over year.
MP Materials (MP - Free Report) shares have soared 146.3% in the past three months, far outpacing the industry’s 0.5% growth, the Zacks Basic Materials sector’s 6.5% rise and the S&P 500’s gain of 9.4%.
The stock’s rally has been driven by major developments during this period. This includes the public-private partnership with the U.S. Department of Defense (DoD) to accelerate a domestic rare earth magnet supply chain and a long-term deal to supply Apple (AAPL - Free Report) with recycled rare earth magnets, followed by solid Q2 production and results.
MP Stock's YTD Performance Against Industry, Sector & S&P 500
Image Source: Zacks Investment Research
MP Materials has also outshone players in the rare earths space like Lynas (LYSDY - Free Report) and Energy Fuels (UUUU - Free Report) , which have advanced 75% and 139.9%, respectively, in the past three months.
MP’s Performance vs. Energy Fuels & Lynas
Image Source: Zacks Investment Research
MP stock is trading above its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.
Image Source: Zacks Investment Research
While this rally may tempt investors, it is important to assess the underlying drivers and their sustainability, as well as the company’s growth prospects and potential risks, before making any investment decision.
Strategic 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 DoD that will fast-track the development of a domestic rare earth magnet supply chain.
MP Reports Solid Production Numbers & Results in Q2
The company produced 597 metric tons of neodymium in the second quarter, a 119% surge from the year-ago quarter. Production volumes continue to increase with further progress on process optimization and ramp-up. REO production increased 45% to 13,145 metric tons on higher recoveries from the continued implementation of Upstream 60K optimizations.
MP Material’s total revenues surged 84% year over year to $57.4 million. Despite higher revenues, the company reported an adjusted loss of 13 cents per share due to higher costs of sales and selling, general, and administrative expenses. However, it came in narrower than the year-ago quarter’s loss of 17 cents per share.
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.
Rising Estimates Instill Confidence in MP’s Earnings
The Zacks Consensus Estimate for MP Materials’ revenues is projected to grow 33.1% year over year in 2025, and a further 118.97% in 2026.
Image Source: Zacks Investment Research
The consensus estimate for 2025 earnings is currently pegged at a loss of 34 cents per share. The estimate for 2026 stands at earnings of 91 cents per share, implying 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 is trading at a forward 12-month price/sales multiple of 22.59X, a significant premium to the industry’s 1.18X.
Image Source: Zacks Investment Research
Energy Fuels is trading higher at 29.94X while Lynas is comparatively a cheaper option, trading at 13.60.
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, including electric vehicles, wind turbines, robotics, drones and defense systems. With China dominating the global supply, the United States 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, solid earnings growth potential for 2026 and ongoing estimate revisions make it an attractive stock for investors to benefit from the solid long-term fundamentals of rare earth products.
Image: Bigstock
Is MP Stock a Buy, Hold, or Sell After Its 146.3% Three-Month Rally?
Key Takeaways
MP Materials (MP - Free Report) shares have soared 146.3% in the past three months, far outpacing the industry’s 0.5% growth, the Zacks Basic Materials sector’s 6.5% rise and the S&P 500’s gain of 9.4%.
The stock’s rally has been driven by major developments during this period. This includes the public-private partnership with the U.S. Department of Defense (DoD) to accelerate a domestic rare earth magnet supply chain and a long-term deal to supply Apple (AAPL - Free Report) with recycled rare earth magnets, followed by solid Q2 production and results.
MP Stock's YTD Performance Against Industry, Sector & S&P 500
Image Source: Zacks Investment Research
MP Materials has also outshone players in the rare earths space like Lynas (LYSDY - Free Report) and Energy Fuels (UUUU - Free Report) , which have advanced 75% and 139.9%, respectively, in the past three months.
MP’s Performance vs. Energy Fuels & Lynas
Image Source: Zacks Investment Research
MP stock is trading above its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.
Image Source: Zacks Investment Research
While this rally may tempt investors, it is important to assess the underlying drivers and their sustainability, as well as the company’s growth prospects and potential risks, before making any investment decision.
Strategic 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 DoD that will fast-track the development of a domestic rare earth magnet supply chain.
MP Reports Solid Production Numbers & Results in Q2
The company produced 597 metric tons of neodymium in the second quarter, a 119% surge from the year-ago quarter. Production volumes continue to increase with further progress on process optimization and ramp-up. REO production increased 45% to 13,145 metric tons on higher recoveries from the continued implementation of Upstream 60K optimizations.
MP Material’s total revenues surged 84% year over year to $57.4 million. Despite higher revenues, the company reported an adjusted loss of 13 cents per share due to higher costs of sales and selling, general, and administrative expenses. However, it came in narrower than the year-ago quarter’s loss of 17 cents per share.
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.
Rising Estimates Instill Confidence in MP’s Earnings
The Zacks Consensus Estimate for MP Materials’ revenues is projected to grow 33.1% year over year in 2025, and a further 118.97% in 2026.
Image Source: Zacks Investment Research
The consensus estimate for 2025 earnings is currently pegged at a loss of 34 cents per share. The estimate for 2026 stands at earnings of 91 cents per share, implying 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 is trading at a forward 12-month price/sales multiple of 22.59X, a significant premium to the industry’s 1.18X.
Image Source: Zacks Investment Research
Energy Fuels is trading higher at 29.94X while Lynas is comparatively a cheaper option, trading at 13.60.
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, including electric vehicles, wind turbines, robotics, drones and defense systems. With China dominating the global supply, the United States 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, solid earnings growth potential for 2026 and ongoing estimate revisions 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.