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MP Dips 5% Despite Q1 Earnings Beat: How to Play the Stock?
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Key Takeaways
MP posted Q1 revenue growth of 49% and adjusted EPS of three cents, beating estimates.
MP Materials hit record NdPr production and sales as magnetics segment revenues jumped.
MP shares fell 5% as higher costs, weak momentum and valuation concerns weighed on sentiment.
MP Materials (MP - Free Report) reported first-quarter 2026 results yesterday, with revenues gaining 49% year over year to around $91 million, surpassing the Zacks Consensus Estimate. The company achieved record neodymium and praseodymium (NdPr) and rare earth oxides (REO) production and NdPr sales.
The company posted adjusted earnings of three cents per share, outperforming the Zacks Consensus Estimate of a loss of one cent and improving sharply from the year-ago loss of 12 cents per share.
Despite the results, MP shares fell 5% after the announcement. The stock’s broader performance has also remained lackluster, with gains of just 7.7% over the past six months, trailing the Zacks Mining - Miscellaneous industry’s growth of 35.3%. The Zacks Basic Materials sector has gained 21.7%, while the S&P 500 has moved up 9.2%. MP stock has trailed other names in the rare earths space like Lynas Rare Earths Limited (LYSDY - Free Report) and Energy Fuels (UUUU - Free Report) , which have advanced 48% and 41.6%, respectively, in the same timeframe.
MP’s Price Performance Against Industry, Sector, S&P 500 & Peers
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 first-quarter results.
MP’s Q1 Highlights: Record Output, Revenues & Earnings Up
MP Materials produced a record 917 metric tons of NdPr, a 63% year-over-year surge as a result of ramping production of separated products. NdPr sales volumes rose 117% to 1,006 metric tons, marking another record for the company. However, MP reported no REO sales during the quarter following its decision to halt rare earth concentrate sales in July 2025.
The Materials segment generated revenues of $72.2 million, up 30% year over year, driven by stronger NdPr sales volumes and pricing, partially offset by the absence of concentrate sales.
The Magnetics segment generated revenues of $21 million in the first quarter, benefiting from higher production of magnetic precursor products. The segment had made its first metal deliveries in the year-ago quarter, generating $5.2 million in revenues.
Overall, total company revenues rose 49% year over year to $90.6 million. MP also recorded $42.3 million in income tied to a price protection agreement (PPA) with the Department of War (DoW).
On the cost side, the cost of sales climbed 52% due to higher sales volumes of NdPr oxide, metal and magnetic precursor products. Selling, general and administrative expenses rose 39.2%, mainly because of increased personnel costs.
Start-up costs surged 503%, reflecting the ramp-up of start-up activities related to magnet production and chlor-alkali facilities. Advanced projects and development expenses spiked 302% due to higher costs incurred for legal, consulting, and advisory services to support growth initiatives
Adjusted EBITDA came in at $36.6 million against a loss of $2.7 million in the year-ago quarter, supported by higher revenues and the PPA income. The company reported adjusted earnings of three cents per share against the year-ago quarter’s loss of 12 cents.
Producing separated rare earth products and magnetic materials involves significantly higher costs than concentrate production, due to additional processing requirements, chemical inputs, labor and maintenance. Cost of sales is thus expected to trend higher, reflecting increased sales of NdPr oxide and metal, along with added costs associated with magnetic precursor products. Start-up costs are also likely to increase further in the coming quarters.
The Zacks Consensus Estimate for MP Materials’ 2026 revenues indicates a 101% increase year over year. The consensus estimate for 2026 earnings is currently pegged at 36 cents per share, suggesting a solid improvement from the loss of 24 cents reported in 2025.
The Zacks Consensus Estimate for MP’s 2027 revenues suggests year-over-year growth of 81.4% with earnings expected to grow 347.3%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP’s 2025 earnings has moved down 28% over the past 60 days while the same for 2027 has moved up 8.4%.
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 21.15X, a significant premium to the industry’s 1.60X. MP’s Value Score of F suggests that the stock is not so cheap and a stretched valuation at this moment.
Image Source: Zacks Investment Research
Among peers, Energy Fuels trades at an even steeper multiple of 31.71X, while Lynas Rare Earths appears comparatively cheaper at 12.59X.
MP Materials Long-Term Outlook Remains Attractive
The company stated that it is expanding operations at Independence and broke ground on the 10X magnetics facility, with scaled heavy rare earth separation commissioning activities set to begin soon at Mountain Pass. The 10X Facility will be the company’s second domestic rare earth magnet manufacturing facility and is expected to begin commissioning in 2028. It is projected to produce an estimated 7,000 MTs of magnets per year. Combined with the Independence facility’s 3,000 MT magnet capacity, MP Materials’ overall U.S. rare earth magnet production capacity will expand to 10,000 MT per year. This will significantly boost domestic output to serve both defense and commercial customers.
Should You Buy MP Stock Right Now?
MP Materials presents a compelling long-term growth narrative supported by unique U.S. strategic positioning, expanding magnet production and strong partnerships with major industrial and technology players. However, considering the premium valuation, unimpressive price performance, rising operating and start-up costs and downward estimate revisions to earnings, it is wise to steer clear of the stock now. MP Materials currently carries a Zacks Rank #4 (Sell).
View the Zacks #1 Rank List
Image: Bigstock
MP Dips 5% Despite Q1 Earnings Beat: How to Play the Stock?
Key Takeaways
MP Materials (MP - Free Report) reported first-quarter 2026 results yesterday, with revenues gaining 49% year over year to around $91 million, surpassing the Zacks Consensus Estimate. The company achieved record neodymium and praseodymium (NdPr) and rare earth oxides (REO) production and NdPr sales.
The company posted adjusted earnings of three cents per share, outperforming the Zacks Consensus Estimate of a loss of one cent and improving sharply from the year-ago loss of 12 cents per share.
Despite the results, MP shares fell 5% after the announcement. The stock’s broader performance has also remained lackluster, with gains of just 7.7% over the past six months, trailing the Zacks Mining - Miscellaneous industry’s growth of 35.3%. The Zacks Basic Materials sector has gained 21.7%, while the S&P 500 has moved up 9.2%. MP stock has trailed other names in the rare earths space like Lynas Rare Earths Limited (LYSDY - Free Report) and Energy Fuels (UUUU - Free Report) , which have advanced 48% and 41.6%, respectively, in the same timeframe.
MP’s Price Performance Against Industry, Sector, S&P 500 & Peers
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 first-quarter results.
MP’s Q1 Highlights: Record Output, Revenues & Earnings Up
MP Materials produced a record 917 metric tons of NdPr, a 63% year-over-year surge as a result of ramping production of separated products. NdPr sales volumes rose 117% to 1,006 metric tons, marking another record for the company. However, MP reported no REO sales during the quarter following its decision to halt rare earth concentrate sales in July 2025.
The Materials segment generated revenues of $72.2 million, up 30% year over year, driven by stronger NdPr sales volumes and pricing, partially offset by the absence of concentrate sales.
The Magnetics segment generated revenues of $21 million in the first quarter, benefiting from higher production of magnetic precursor products. The segment had made its first metal deliveries in the year-ago quarter, generating $5.2 million in revenues.
Overall, total company revenues rose 49% year over year to $90.6 million. MP also recorded $42.3 million in income tied to a price protection agreement (PPA) with the Department of War (DoW).
On the cost side, the cost of sales climbed 52% due to higher sales volumes of NdPr oxide, metal and magnetic precursor products. Selling, general and administrative expenses rose 39.2%, mainly because of increased personnel costs.
Start-up costs surged 503%, reflecting the ramp-up of start-up activities related to magnet production and chlor-alkali facilities. Advanced projects and development expenses spiked 302% due to higher costs incurred for legal, consulting, and advisory services to support growth initiatives
Adjusted EBITDA came in at $36.6 million against a loss of $2.7 million in the year-ago quarter, supported by higher revenues and the PPA income. The company reported adjusted earnings of three cents per share against the year-ago quarter’s loss of 12 cents.
Producing separated rare earth products and magnetic materials involves significantly higher costs than concentrate production, due to additional processing requirements, chemical inputs, labor and maintenance. Cost of sales is thus expected to trend higher, reflecting increased sales of NdPr oxide and metal, along with added costs associated with magnetic precursor products. Start-up costs are also likely to increase further in the coming quarters.
MP’s Estimates Suggest Growth, Revisions Seem Mixed
The Zacks Consensus Estimate for MP Materials’ 2026 revenues indicates a 101% increase year over year. The consensus estimate for 2026 earnings is currently pegged at 36 cents per share, suggesting a solid improvement from the loss of 24 cents reported in 2025.
The Zacks Consensus Estimate for MP’s 2027 revenues suggests year-over-year growth of 81.4% with earnings expected to grow 347.3%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP’s 2025 earnings has moved down 28% over the past 60 days while the same for 2027 has moved up 8.4%.
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 21.15X, a significant premium to the industry’s 1.60X. MP’s Value Score of F suggests that the stock is not so cheap and a stretched valuation at this moment.
Image Source: Zacks Investment Research
Among peers, Energy Fuels trades at an even steeper multiple of 31.71X, while Lynas Rare Earths appears comparatively cheaper at 12.59X.
MP Materials Long-Term Outlook Remains Attractive
The company stated that it is expanding operations at Independence and broke ground on the 10X magnetics facility, with scaled heavy rare earth separation commissioning activities set to begin soon at Mountain Pass. The 10X Facility will be the company’s second domestic rare earth magnet manufacturing facility and is expected to begin commissioning in 2028. It is projected to produce an estimated 7,000 MTs of magnets per year. Combined with the Independence facility’s 3,000 MT magnet capacity, MP Materials’ overall U.S. rare earth magnet production capacity will expand to 10,000 MT per year. This will significantly boost domestic output to serve both defense and commercial customers.
Should You Buy MP Stock Right Now?
MP Materials presents a compelling long-term growth narrative supported by unique U.S. strategic positioning, expanding magnet production and strong partnerships with major industrial and technology players. However, considering the premium valuation, unimpressive price performance, rising operating and start-up costs and downward estimate revisions to earnings, it is wise to steer clear of the stock now. MP Materials currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.