MP Materials Trades at a Premium: Buy, Sell or Hold the Stock?

MP Materials MP is trading at a forward 12-month price/sales multiple of 20.95X, a significant premium to the industry’s 1.43X. It has a Value Score of F, which suggests that the stock appears expensive at current levels.

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Among rare earth peers, USA Rare Earth, Inc. USAR is trading higher at 28.10X, while Lynas Rare Earths Limited LYSDY offers a relatively cheaper valuation at 14.26X.

MP Material’s Stock Performance Lags Industry and Key Peers

MP Materials shares have gained 12.7% in the past three months, underperforming the industry’s 21.6% growth. The Zacks Basic Materials sector gained 15.4% while the S&P 500 declined 0.7%. Over this period, Lynas Rare Earths gained 77.3%, and USA Rare Earth shares moved up 32.8%.

MP's 3 Month Performance Against Industry, Sector, S&P 500 & Peers

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MP Continues to Deliver Strong Operational Progress

MP Materials doubled its NdPr (Neodymium-Praseodymium) oxide production at Mountain Pass to a record 2,599 MTs in 2025. The increase reflects ongoing process optimization and continued ramp-up in production capabilities. The company exited 2025 with a nearly 4,000 MT per year run rate.

Rare earth oxide concentrate production reached a record 50,692 metric tons, marking a 12% year-over-year increase driven by improved recoveries and operational efficiencies. The company produced its first magnets on commercial-scale equipment at the Independence facility, marking a key milestone in its downstream magnet manufacturing strategy. MP received the final $50 million prepayment for magnetic precursor products under its long-term supply agreement with General Motors.

In 2026, MP Materials expects to continue delivering growth in NdPr output. It plans to break ground on the 10X magnetics facility in Northlake, TX, while ramping magnet production for General Motors. 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.

MP Sees Improved Results in 2025, Entered Strategic Partnerships

Revenues increased 10% year over year to $224 million in 2025 on higher NdPr oxide and metal revenues as well as revenues from the sales of magnetic precursor products, with no comparable revenues in the prior year. This was partially offset by lower rare earth concentrate revenues, owing to the MP’s decision to cease sales to China starting in July 2025.

Adjusted earnings per share in 2025 were a loss of 24 cents, an improvement from the loss of 44 cents in 2024. This was driven by the NdPr price floor protection agreement with the DoW (the Price Protection Agreement or PPA) for NdPr products, which commenced on Oct. 1, 2025, as well as the commencement of magnetic precursor product sales. This was somewhat offset by higher legal costs, as well as increased advanced projects and development expenses, which included transaction costs associated with the DoW agreements and securing financing.

MP ended 2025 with $1.83 billion in cash and a lower debt-to-capital ratio of 0.33. It projects $500–$600 million in capex in 2026 to fund expansion, recycling and heavy rare earth separation initiatives.

2025 was a pivotal year for MP Materials, highlighted by a long-term agreement to supply U.S.-made recycled rare earth magnets to Apple and a public-private partnership with the U.S. Department of War to accelerate a fully integrated domestic magnet supply chain. Backed by government incentives, the company will construct the 10X Facility. MP also expects to extend the lifespan of Mountain Pass through further exploration and enhanced processing. The company was awarded a $200 million incentive package, anchored by the Texas Semiconductor Innovation Fund (TSIF) grant, for the new facility.

MP Material’s Earnings Estimates Trend Downward

The Zacks Consensus Estimate for MP Materials’ 2026 and 2027 earnings has moved down in the past 60 days, as shown below.

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Despite the revisions, the estimate for 2026 is pegged at earnings of 38 cents per share, which suggests a turnaround performance from the loss of 24 cents in 2025. The estimate for 2026 is pegged at a profit of $1.11, indicating a solid 192% improvement.

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MP Materials Seems Well-Positioned for Long-Term Growth

The company’s Mountain Pass Rare Earth Mine and Processing Facility is the only rare earth mining and processing site of scale in North America. The United States increasingly prioritizing the development of domestic rare earth capabilities created a favorable backdrop for MP’s expansion initiatives.
Through government partnerships, large-scale magnet manufacturing projects and strategic agreements with companies such as Apple, MP Materials is working toward building a fully integrated rare earth supply chain within the United States.

Our Final Take on MP Stock

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. Existing shareholders may benefit from staying invested to capture these long-term fundamentals.

However, new investors can wait for a better entry point, considering the premium valuation and recent downward revisions to earnings estimates. MP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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