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MP vs. USAR: Which Rare-Earth Play Looks Stronger Right Now?
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Key Takeaways
MP advances a fully integrated U.S. rare earth supply chain with major DoW-backed commitments.
MP boosts separated output, builds new facilities and targets a return to profitability by 2026.
USAR grows via its LCM acquisition and Stillwater plant buildout but remains without revenues.
MP Materials (MP - Free Report) and USA Rare Earth, Inc. (USAR - Free Report) are two U.S.-based companies in the rare-earth metals and magnets space. Rare earths are crucial to the production of high-performance magnets used in EVs, defense and high-tech applications. With China dominating the global supply, the United States is increasingly prioritizing the development of domestic rare earth capabilities. Both companies are expected to play key roles in capitalizing on this initiative.
Las Vegas, NV-based MP Materials is the only fully integrated rare earth producer in the United States. It has capabilities covering the entire supply chain, from mining and processing to advanced metallization and magnet manufacturing. MP has a market capitalization of $9.8 billion. Stillwater OK- OK-based USA Rare Earth, valued at around $1.70 billion, is currently building a sintered neo magnet manufacturing facility, expected to start commercial production in the first half of 2026.
For investors seeking exposure to the long-term growth of rare earths, the question becomes: which stock offers a more compelling opportunity, MP or USAR? Below is a breakdown of their fundamentals, growth catalysts and key headwinds.
The Case for MP Materials
The company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility, the only large-scale rare earth mining and processing site in North America.
In July, MP Materials secured a landmark deal with the United States Department of War (DoW), formerly known as the Department of Defense to fast-track the development of a fully integrated domestic rare earth magnet supply chain. The deal consists of a comprehensive, long-term package of commitments from the DoD, including equity investments, loan financing, purchase commitments and pricing support.
Backed by 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. MP also expects to extend the lifespan of Mountain Pass through further exploration and enhanced processing.
MP plans to begin commissioning its new heavy rare earth separation facility at Mountain Pass in mid-2026. The facility can process approximately 3,000 MT of feedstock annually. It will initially prioritize the production of dysprosium (Dy) and terbium (Tb). The Dy/Tb circuit will have a nameplate capacity of 200 MT per year and support MP’s targeted annual production of 10,000 MT of high-performance NdFeB magnets.
Following the initial Dy and Tb production, MP plans to commence production of additional heavy rare earth products, starting with samarium (Sm) per its agreement with the DoW.
In the third quarter of 2025, MP Materials’ total revenues declined 14.9% year over year to $53.6 million. This reflected its decision to withhold the sale of rare earth concentrates to China.
The company produced a record 721 metric tons of NdPr, marking a 51% year-over-year surge as a result of ramping production of separated products. REO production was down 4% to 13,254 metric tons, its second-best quarterly numbers.
Selling, general and administrative expenses were up 32% due to higher legal costs and increased employee headcount to support downstream expansion. MP Materials witnessed an 828% surge (or $17 million) spike in advanced projects and development expenses. This included transaction costs associated with the DoW agreements and financing.
MP Materials reported an adjusted loss of 10 cents per share for the quarter compared with the year-ago quarter’s loss of 12 cents.
The company ended the third quarter with $1.15 million of cash and a total debt to capital ratio of 0.29.
MP’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 and likely lead to a full-year loss. The company, however, expects a return to profitability in the fourth quarter of 2025 and in 2026.
MP Materials recently partnered with the DoW to establish a strategic joint venture with the Saudi Arabian Mining Company (Maaden), Saudi Arabia’s flagship mining company, to develop a rare earth refinery in the Kingdom.
The Case for USA Rare Earth
USA Rare Earth is developing a rare earth sintered neo magnet (NdFeB) manufacturing plant in Stillwater, OK, which is expected to start production in early 2026. It also holds certain mining rights to the Round Top Mountain deposit near Sierra Blanca, TX, but has not started mineral extraction.
The company has not generated any revenues since its inception. In the third quarter, selling, general and administrative expenses climbed to $11.4 million from $0.8 million in the year-ago quarter, driven by an increase in legal and consulting costs, higher headcount and recruiting fees and other costs. Research and development expenses were $4.45 million compared with $1.16 million due to an increase in employee-related expenses related to a rise in headcount and other costs.
The absence of revenues and higher expenses, somewhat offset by higher interest and dividend income due to higher balances in its money market funds, led to the 25 cents per share loss in the third quarter of 2025.
USA Rare Earth ended the third quarter with $258 million in cash and no significant debt. The company received a $125 million common equity investment providing capital to execute its growth plans.
In a major strategic move, the company has acquired LCM, a UK-based manufacturer of specialized rare earth metals and both cast and strip cast alloys. LCM is the only proven ex-China producer of both light and heavy rare earth permanent magnet metals and alloys at scale. The acquisition will significantly accelerate USA Rare Earth’s mine-to-magnet strategy, establishing an end-to-end rare earth supply chain.
Recently, LCM established a strategic partnership with Solvay, a multinational chemical company, to supply rare earth metals to Permag, a leader in high-precision magnets and magnetic assemblies. This partnership will ensure a secure supply of Samarium for the European market and Permag's global customer base.
How do Estimates Compare for MP & USAR?
The Zacks Consensus Estimate for MP Materials’ fiscal 2025 earnings is pegged at a loss of 21 cents per share, narrower than the loss of 44 cents in fiscal 2024. The estimate for fiscal 2026 for MP Materials is pegged at earnings of 73 cents.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for USAR’s fiscal 2025 earnings is at a loss of 65 cents per share, The fiscal 2027 estimate is at a loss of 41 cents per share.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings for MP Materials for 2025 has moved up over the past days, while the same for 2026 has moved down, as shown in the chart below.
Image Source: Zacks Investment Research
Both the earnings estimates for 2025 and 2026 for USAR have seen downward estimate revisions over the past 60 days.
Image Source: Zacks Investment Research
MP & USAR: Price Performance
So far this year, MP Materials stock has gained 254.3% compared with USA Rare Earth’s 6.6% rise.
Image Source: Zacks Investment Research
MP Materials or USA Rare Earth: Which Stock is the Better Buy?
Both MP and USAR currently carry a Zacks Rank #3 (Hold), signaling a balanced risk-reward profile for each. They offer meaningful long-term growth potential in a strategically important sector. However, MP is currently the more established and operationally mature company. It has active production, strategic government partnerships, expanding capacity and a clearer path to near-term profitability. While rising costs will weigh on short-term results, MP’s return to profitability expected in 2026 strengthens its investment case.
USA Rare Earth’s acquisition of LCM and the development of its Stillwater facility position it to become a key player in rebuilding the U.S. rare earth supply chain. While the company’s mine-to-magnet integration strategy is compelling, continued losses, lack of current revenues and estimated downgrades suggest that profitability remains a few years away. Overall, MP stock appears to be the better choice.
Image: Bigstock
MP vs. USAR: Which Rare-Earth Play Looks Stronger Right Now?
Key Takeaways
MP Materials (MP - Free Report) and USA Rare Earth, Inc. (USAR - Free Report) are two U.S.-based companies in the rare-earth metals and magnets space. Rare earths are crucial to the production of high-performance magnets used in EVs, defense and high-tech applications. With China dominating the global supply, the United States is increasingly prioritizing the development of domestic rare earth capabilities. Both companies are expected to play key roles in capitalizing on this initiative.
Las Vegas, NV-based MP Materials is the only fully integrated rare earth producer in the United States. It has capabilities covering the entire supply chain, from mining and processing to advanced metallization and magnet manufacturing. MP has a market capitalization of $9.8 billion. Stillwater OK- OK-based USA Rare Earth, valued at around $1.70 billion, is currently building a sintered neo magnet manufacturing facility, expected to start commercial production in the first half of 2026.
For investors seeking exposure to the long-term growth of rare earths, the question becomes: which stock offers a more compelling opportunity, MP or USAR? Below is a breakdown of their fundamentals, growth catalysts and key headwinds.
The Case for MP Materials
The company owns and operates the Mountain Pass Rare Earth Mine and Processing Facility, the only large-scale rare earth mining and processing site in North America.
In July, MP Materials secured a landmark deal with the United States Department of War (DoW), formerly known as the Department of Defense to fast-track the development of a fully integrated domestic rare earth magnet supply chain. The deal consists of a comprehensive, long-term package of commitments from the DoD, including equity investments, loan financing, purchase commitments and pricing support.
Backed by 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. MP also expects to extend the lifespan of Mountain Pass through further exploration and enhanced processing.
MP plans to begin commissioning its new heavy rare earth separation facility at Mountain Pass in mid-2026. The facility can process approximately 3,000 MT of feedstock annually. It will initially prioritize the production of dysprosium (Dy) and terbium (Tb). The Dy/Tb circuit will have a nameplate capacity of 200 MT per year and support MP’s targeted annual production of 10,000 MT of high-performance NdFeB magnets.
Following the initial Dy and Tb production, MP plans to commence production of additional heavy rare earth products, starting with samarium (Sm) per its agreement with the DoW.
In the third quarter of 2025, MP Materials’ total revenues declined 14.9% year over year to $53.6 million. This reflected its decision to withhold the sale of rare earth concentrates to China.
The company produced a record 721 metric tons of NdPr, marking a 51% year-over-year surge as a result of ramping production of separated products. REO production was down 4% to 13,254 metric tons, its second-best quarterly numbers.
Selling, general and administrative expenses were up 32% due to higher legal costs and increased employee headcount to support downstream expansion. MP Materials witnessed an 828% surge (or $17 million) spike in advanced projects and development expenses. This included transaction costs associated with the DoW agreements and financing.
MP Materials reported an adjusted loss of 10 cents per share for the quarter compared with the year-ago quarter’s loss of 12 cents.
The company ended the third quarter with $1.15 million of cash and a total debt to capital ratio of 0.29.
MP’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 and likely lead to a full-year loss. The company, however, expects a return to profitability in the fourth quarter of 2025 and in 2026.
MP Materials recently partnered with the DoW to establish a strategic joint venture with the Saudi Arabian Mining Company (Maaden), Saudi Arabia’s flagship mining company, to develop a rare earth refinery in the Kingdom.
The Case for USA Rare Earth
USA Rare Earth is developing a rare earth sintered neo magnet (NdFeB) manufacturing plant in Stillwater, OK, which is expected to start production in early 2026. It also holds certain mining rights to the Round Top Mountain deposit near Sierra Blanca, TX, but has not started mineral extraction.
The company has not generated any revenues since its inception. In the third quarter, selling, general and administrative expenses climbed to $11.4 million from $0.8 million in the year-ago quarter, driven by an increase in legal and consulting costs, higher headcount and recruiting fees and other costs. Research and development expenses were $4.45 million compared with $1.16 million due to an increase in employee-related expenses related to a rise in headcount and other costs.
The absence of revenues and higher expenses, somewhat offset by higher interest and dividend income due to higher balances in its money market funds, led to the 25 cents per share loss in the third quarter of 2025.
USA Rare Earth ended the third quarter with $258 million in cash and no significant debt. The company received a $125 million common equity investment providing capital to execute its growth plans.
In a major strategic move, the company has acquired LCM, a UK-based manufacturer of specialized rare earth metals and both cast and strip cast alloys. LCM is the only proven ex-China producer of both light and heavy rare earth permanent magnet metals and alloys at scale. The acquisition will significantly accelerate USA Rare Earth’s mine-to-magnet strategy, establishing an end-to-end rare earth supply chain.
Recently, LCM established a strategic partnership with Solvay, a multinational chemical company, to supply rare earth metals to Permag, a leader in high-precision magnets and magnetic assemblies. This partnership will ensure a secure supply of Samarium for the European market and Permag's global customer base.
How do Estimates Compare for MP & USAR?
The Zacks Consensus Estimate for MP Materials’ fiscal 2025 earnings is pegged at a loss of 21 cents per share, narrower than the loss of 44 cents in fiscal 2024. The estimate for fiscal 2026 for MP Materials is pegged at earnings of 73 cents.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for USAR’s fiscal 2025 earnings is at a loss of 65 cents per share, The fiscal 2027 estimate is at a loss of 41 cents per share.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings for MP Materials for 2025 has moved up over the past days, while the same for 2026 has moved down, as shown in the chart below.
Image Source: Zacks Investment Research
Both the earnings estimates for 2025 and 2026 for USAR have seen downward estimate revisions over the past 60 days.
Image Source: Zacks Investment Research
MP & USAR: Price Performance
So far this year, MP Materials stock has gained 254.3% compared with USA Rare Earth’s 6.6% rise.
Image Source: Zacks Investment Research
MP Materials or USA Rare Earth: Which Stock is the Better Buy?
Both MP and USAR currently carry a Zacks Rank #3 (Hold), signaling a balanced risk-reward profile for each. They offer meaningful long-term growth potential in a strategically important sector. However, MP is currently the more established and operationally mature company. It has active production, strategic government partnerships, expanding capacity and a clearer path to near-term profitability. While rising costs will weigh on short-term results, MP’s return to profitability expected in 2026 strengthens its investment case.
USA Rare Earth’s acquisition of LCM and the development of its Stillwater facility position it to become a key player in rebuilding the U.S. rare earth supply chain. While the company’s mine-to-magnet integration strategy is compelling, continued losses, lack of current revenues and estimated downgrades suggest that profitability remains a few years away. Overall, MP stock appears to be the better choice.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.