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MP Expects Return to Profitability in Q4: Achievable or Too Ambitious?
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Key Takeaways
MP Materials has posted eight straight adjusted losses since Q4 2023 after starting separated REO production.
MP faces elevated costs from NdPr metal ramp-ups, keeping margins pressured.
MP Materials expects profitability in Q425, supported by higher volumes and a DoW price protection agreement.
MP Materials Corp. (MP - Free Report) has reported adjusted losses for eight straight quarters, reflecting cost pressures as it advances its downstream expansion strategy. The last adjusted profit was recorded by MP Materials in the third quarter of 2023. Since the fourth quarter of that year, earnings have remained in the red, as the company commenced production and sales of separated rare earth oxides, most notably neodymium-praseodymium (NdPr) oxide.
Producing separated products is more costly than producing rare earth concentrates due to the additional processing required. These additional costs pertain to chemical reagents, employee labor, maintenance expenses and consumables.
Due to the initial ramp-up of separated rare earth products, MP Materials’ cost of sales nearly doubled to $192.6 million from $92.7 million in 2023. Costs were around 94% of revenues in 2024 from just 37% a year earlier. In the first nine months of 2025, the cost of sales was up 10% from the year-ago period. During this period, the increase in costs also reflects the production of magnetic precursor products, specifically neodymium-praseodymium (NdPr) metal at its Independence Facility.
As the company expanded its workforce to support the downstream expansion, selling, general and administrative (SG&A) expenses were up 5% in 2024 and 25% in the first nine months of 2025, compared with prior year periods.
These steep costs have resulted in continued losses for MP Materials. As the company expands production of separated rare earth products at the Mountain Pass site and ramps up output of magnetic precursor products at the Independence Facility, the cost of sales is expected to stay elevated through 2025.
Despite these near-term challenges, MP Materials expects to return to profitability starting in the fourth quarter of 2025. With the United States Department of War’s (DoW) Price Protection Agreement commencing on Oct. 1, 2025, it will provide revenue stability and offset margin pressure.
At the same time, NdPr production volumes continue to rise as process optimization and ramp-up efforts progress. Higher output, increased sales volumes and improved pricing for NdPr are expected to support stronger financial performance for MP Materials in the upcoming quarters.
How Are MP’s Peers Faring?
Energy Fuels (UUUU - Free Report) , a major producer of uranium in the United States, started producing separated NdPr in 2024 after making enhancements at its White Mesa Mill. The company plans to start "heavy" rare earth oxide production by the fourth quarter of 2026.
Energy Fuels witnessed a 108% surge in its cost of sales to $34.6 million (89% of its revenues) in the first nine-month period of 2025 due to higher costs related to the mining of lower-grade Heavy Mineral Sand products at the end of the Kwale mine life. Total operating expenses surged 106% year over year to $117.8 million in the first nine months, attributed to a 214% surge in exploration, development and processing expenses and a 115% spike in SG&A expenses. Energy Fuels reported adjusted losses in all the quarters of 2025.
USA Rare Earth Inc. (USAR - Free Report) 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 begun mineral extraction.
USA Rare Earth has not generated any revenues since its inception and continues to incur losses from operations. The company’s operating expenses soared 245% to $33.4 million in the first nine-month period of 2025. USA Rare Earth’s adjusted loss for the nine-month period of 2025 was $2.83 per share compared with a loss of 15 cents per share in the year-ago period.
MP’s Price Performance, Valuation & Estimates
MP Materials’ shares have skyrocketed 263.2% so far this year compared with the industry’s 34.8% growth.
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 24.69X, a significant premium to the industry’s 1.44X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP Materials’ fourth-quarter 2025 earnings is 10 cents per share, which suggests a solid improvement from the prior-year quarter’s loss of 12 cents.
The estimate for 2025 earnings is pegged at a loss of 21 cents per share, indicating the losses incurred in the first three quarters of the year.
However, the bottom-line estimate for 2026 is pegged at earnings of 69 cents per share, indicating a solid improvement. The estimates for 2025 and 2026 have remained unchanged, while the same for 2026 has moved down in the past 60 days, as shown in the chart below.
Image: Shutterstock
MP Expects Return to Profitability in Q4: Achievable or Too Ambitious?
Key Takeaways
MP Materials Corp. (MP - Free Report) has reported adjusted losses for eight straight quarters, reflecting cost pressures as it advances its downstream expansion strategy.
The last adjusted profit was recorded by MP Materials in the third quarter of 2023. Since the fourth quarter of that year, earnings have remained in the red, as the company commenced production and sales of separated rare earth oxides, most notably neodymium-praseodymium (NdPr) oxide.
Producing separated products is more costly than producing rare earth concentrates due to the additional processing required. These additional costs pertain to chemical reagents, employee labor, maintenance expenses and consumables.
Due to the initial ramp-up of separated rare earth products, MP Materials’ cost of sales nearly doubled to $192.6 million from $92.7 million in 2023. Costs were around 94% of revenues in 2024 from just 37% a year earlier. In the first nine months of 2025, the cost of sales was up 10% from the year-ago period. During this period, the increase in costs also reflects the production of magnetic precursor products, specifically neodymium-praseodymium (NdPr) metal at its Independence Facility.
As the company expanded its workforce to support the downstream expansion, selling, general and administrative (SG&A) expenses were up 5% in 2024 and 25% in the first nine months of 2025, compared with prior year periods.
These steep costs have resulted in continued losses for MP Materials. As the company expands production of separated rare earth products at the Mountain Pass site and ramps up output of magnetic precursor products at the Independence Facility, the cost of sales is expected to stay elevated through 2025.
Despite these near-term challenges, MP Materials expects to return to profitability starting in the fourth quarter of 2025. With the United States Department of War’s (DoW) Price Protection Agreement commencing on Oct. 1, 2025, it will provide revenue stability and offset margin pressure.
At the same time, NdPr production volumes continue to rise as process optimization and ramp-up efforts progress. Higher output, increased sales volumes and improved pricing for NdPr are expected to support stronger financial performance for MP Materials in the upcoming quarters.
How Are MP’s Peers Faring?
Energy Fuels (UUUU - Free Report) , a major producer of uranium in the United States, started producing separated NdPr in 2024 after making enhancements at its White Mesa Mill. The company plans to start "heavy" rare earth oxide production by the fourth quarter of 2026.
Energy Fuels witnessed a 108% surge in its cost of sales to $34.6 million (89% of its revenues) in the first nine-month period of 2025 due to higher costs related to the mining of lower-grade Heavy Mineral Sand products at the end of the Kwale mine life. Total operating expenses surged 106% year over year to $117.8 million in the first nine months, attributed to a 214% surge in exploration, development and processing expenses and a 115% spike in SG&A expenses. Energy Fuels reported adjusted losses in all the quarters of 2025.
USA Rare Earth Inc. (USAR - Free Report) 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 begun mineral extraction.
USA Rare Earth has not generated any revenues since its inception and continues to incur losses from operations. The company’s operating expenses soared 245% to $33.4 million in the first nine-month period of 2025. USA Rare Earth’s adjusted loss for the nine-month period of 2025 was $2.83 per share compared with a loss of 15 cents per share in the year-ago period.
MP’s Price Performance, Valuation & Estimates
MP Materials’ shares have skyrocketed 263.2% so far this year compared with the industry’s 34.8% growth.
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 24.69X, a significant premium to the industry’s 1.44X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP Materials’ fourth-quarter 2025 earnings is 10 cents per share, which suggests a solid improvement from the prior-year quarter’s loss of 12 cents.
The estimate for 2025 earnings is pegged at a loss of 21 cents per share, indicating the losses incurred in the first three quarters of the year.
However, the bottom-line estimate for 2026 is pegged at earnings of 69 cents per share, indicating a solid improvement. The estimates for 2025 and 2026 have remained unchanged, while the same for 2026 has moved down in the past 60 days, as shown in the chart below.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.