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MP Materials' Magnetics Segment: Can It Unlock the Next Growth Phase?
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Key Takeaways
MP Materials delivered magnets to GM for qualification testing, with commercial shipments expected in Q4.
The 10X Facility could add 7,000 metric tons of annual magnet capacity when operational.
Magnetics revenues rose 50% in the first half of 2026, while adjusted EBITDA nearly doubled.
MP Materials (MP - Free Report) is advancing its strategy to move beyond rare earth mining and processing into higher-value magnet manufacturing. During the second quarter of 2026, MP Materials delivered magnets to General Motors (GM - Free Report) for in-vehicle qualification testing. MP expects to begin commercial shipments of magnets in the fourth quarter, followed by a steady production ramp.
The Magnetics segment represents the downstream magnet manufacturing and related operations of MP Materials. It includes the Independence Facility, where the company produces and sells magnetic precursor products and started manufacturing neodymium-iron-boron (NdFeB) permanent magnets in December 2025.
MP is constructing a second magnet manufacturing facility in Northlake, TX, known as the “10X Facility”. It is expected to boost MP's overall U.S. rare earth magnet production capacity to roughly 10,000 metric tons per year. The company is also extending its heavy rare earth elements refining capability at Mountain Pass, enabling a more complete domestic supply chain for permanent magnets.
The Magnetics segment generated $37.6 million in revenues in the first half of 2026, up 50% year over year, while adjusted EBITDA nearly doubled to $17.1 million from $8.6 million. Revenues had surged 306% year over year to $21.1 million in the first quarter of 2026, driven by increased production of magnetic precursor products. Segment adjusted EBITDA reached $9.6 million compared with $0.49 million in the year-ago quarter. In the second quarter, revenues declined 17% year over year to $16.5 million, while segment adjusted EBITDA fell 7% to $7.5 million.
The decline in second-quarter revenues reflected the startup of magnet production at the Independence Facility and its impact on the pricing mechanism for magnetic products. Therefore, the quarterly decline does not necessarily indicate weaker underlying demand for the company’s downstream business.
Notably, the Magnetics segment began generating revenues from magnetic precursor sales to General Motors in the first quarter of 2025. As of June 30, 2026, MP has collected $150 million in required prepayments for the sale of magnetic precursor products to GM under its long-term supply agreement. As of that date, the company had delivered $104.5 million of magnetic precursor products and the remaining delivery of $45.5 million will likely be made within one year. Once that is completed, MP does not expect additional precursor sales to GM, and instead plans to begin sales of finished magnets in 2026.
MP is also broadening its downstream opportunity through Project Swarm, an initiative with U.S. and allied drone manufacturers to aggregate and standardize future magnet demand. In addition, its partnership with Apple (AAPL - Free Report) covering magnet recycling, production and joint development continues to progress.
The Magnetics segment has established meaningful revenues and profitability, but its next phase of growth will depend on customer qualification, commercial magnet shipments and the production ramp at Independence and 10X. Successful execution on these milestones could increasingly position downstream magnet manufacturing as a larger contributor to MP’s growth.
MP’s Price Performance, Valuation & Estimates
MP Materials’ shares have declined 36.1% in a year against the industry’s 28.4% growth.
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 12.72X, a significant premium to the industry’s 1.43X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP Materials’ 2026 earnings is pegged at eight cents per share, indicating an improvement from the loss of 24 cents in 2025. The estimate for 2027 is 88 cents per share, indicating a 1,009% year-over-year improvement.
Image Source: Zacks Investment Research
The estimate for both 2026 and 2027 has, however, 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 #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
MP Materials' Magnetics Segment: Can It Unlock the Next Growth Phase?
Key Takeaways
MP Materials (MP - Free Report) is advancing its strategy to move beyond rare earth mining and processing into higher-value magnet manufacturing. During the second quarter of 2026, MP Materials delivered magnets to General Motors (GM - Free Report) for in-vehicle qualification testing. MP expects to begin commercial shipments of magnets in the fourth quarter, followed by a steady production ramp.
The Magnetics segment represents the downstream magnet manufacturing and related operations of MP Materials. It includes the Independence Facility, where the company produces and sells magnetic precursor products and started manufacturing neodymium-iron-boron (NdFeB) permanent magnets in December 2025.
MP is constructing a second magnet manufacturing facility in Northlake, TX, known as the “10X Facility”. It is expected to boost MP's overall U.S. rare earth magnet production capacity to roughly 10,000 metric tons per year. The company is also extending its heavy rare earth elements refining capability at Mountain Pass, enabling a more complete domestic supply chain for permanent magnets.
The Magnetics segment generated $37.6 million in revenues in the first half of 2026, up 50% year over year, while adjusted EBITDA nearly doubled to $17.1 million from $8.6 million. Revenues had surged 306% year over year to $21.1 million in the first quarter of 2026, driven by increased production of magnetic precursor products. Segment adjusted EBITDA reached $9.6 million compared with $0.49 million in the year-ago quarter. In the second quarter, revenues declined 17% year over year to $16.5 million, while segment adjusted EBITDA fell 7% to $7.5 million.
The decline in second-quarter revenues reflected the startup of magnet production at the Independence Facility and its impact on the pricing mechanism for magnetic products. Therefore, the quarterly decline does not necessarily indicate weaker underlying demand for the company’s downstream business.
Notably, the Magnetics segment began generating revenues from magnetic precursor sales to General Motors in the first quarter of 2025. As of June 30, 2026, MP has collected $150 million in required prepayments for the sale of magnetic precursor products to GM under its long-term supply agreement. As of that date, the company had delivered $104.5 million of magnetic precursor products and the remaining delivery of $45.5 million will likely be made within one year. Once that is completed, MP does not expect additional precursor sales to GM, and instead plans to begin sales of finished magnets in 2026.
MP is also broadening its downstream opportunity through Project Swarm, an initiative with U.S. and allied drone manufacturers to aggregate and standardize future magnet demand. In addition, its partnership with Apple (AAPL - Free Report) covering magnet recycling, production and joint development continues to progress.
The Magnetics segment has established meaningful revenues and profitability, but its next phase of growth will depend on customer qualification, commercial magnet shipments and the production ramp at Independence and 10X. Successful execution on these milestones could increasingly position downstream magnet manufacturing as a larger contributor to MP’s growth.
MP’s Price Performance, Valuation & Estimates
MP Materials’ shares have declined 36.1% in a year against the industry’s 28.4% growth.
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 12.72X, a significant premium to the industry’s 1.43X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for MP Materials’ 2026 earnings is pegged at eight cents per share, indicating an improvement from the loss of 24 cents in 2025. The estimate for 2027 is 88 cents per share, indicating a 1,009% year-over-year improvement.
Image Source: Zacks Investment Research
The estimate for both 2026 and 2027 has, however, 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 #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.