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Should You Buy, Hold or Sell MP Materials Stock Ahead of Q2 Earnings?
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Key Takeaways
{\"0\":\"MP Materials is expected to report Q2 revenues of $45.38M, up 45.17% from the year-ago quarter.\",\"1\":\"Higher NdPr output and Magnetics segment growth are key drivers of expected revenue gains.\",\"2\":\"Export halt to China and rising costs may offset gains, with Q2 EPS projected at a loss of 16 cents.\"}
The consensus estimate for MP’s second-quarter revenues is $45.38 million, indicating a 45.17% increase from the year-ago quarter's reported figure of $31.26 million.
The Zacks Consensus Estimate for earnings is pegged at a loss of 16 cents per share. The estimate has moved down from a loss of 15 cents to the current loss of 16 cents over the past 60 days. MP Materials reported a loss of 17 cents per share in the year-ago quarter.
Image Source: Zacks Investment Research
MP Materials’ Earnings Surprise History
MP Materials’ earnings missed the Zacks Consensus Estimates in three of the trailing four quarters and matched in one quarter. The company has a trailing four-quarter negative earnings surprise of 24.77%, on average.
Image Source: Zacks Investment Research
What the Zacks Model Unveils for MP Stock
Our proven model does not conclusively predict an earnings beat for MP Materials this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: MP has an Earnings ESP of -8.97%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Factors Likely to Have Shaped MP Materials’ Q2 Performance
MP Materials reported record production of neodymium and praseodymium (NdPr) reaching 563 metric tons in the first quarter, a 330% surge from the year-ago quarter. NdPr sales volumes were up 246% year over year to 464 metric tons, attributed to the shift to production of midstream products, mainly NdPr oxide.
REO production increased 10% year over year to 12,213 metric tons on higher recoveries from the continued implementation of Upstream 60K optimizations.
However, as MP Materials ramped up its midstream operations, much of the REO output was diverted to the production of separated rare earth products rather than being sold as concentrate. As a result, REO sales volumes dropped 33%, leading to a $10 million decline in rare earth concentrate revenues.
The Magnetics segment made its first metal deliveries in March and contributed revenues of $5.2 million in the quarter. We expect MP Material’s total revenues in the second quarter to reflect the above strength in NdPr production and a full-quarter contribution from the Magnetics segment.
In April, MP Materials halted rare earth concentrate shipments to China in response to Chinese tariffs and export controls, cutting off a revenue stream. Considering that this sale accounted for approximately 50% of the company’s revenues in the first quarter of 2025, this is expected to have been a headwind to its revenue performance during the second quarter.
MP Materials has experienced a significant jump in its costs of sales over the past year. In the first quarter, the cost of sales surged 37% due to higher production costs. Selling, general and administrative expenses were up 14% on higher employee headcount to support downstream expansion. The company’s strategy of producing and selling more separated products at Mountain Pass is likely to have led to higher costs. This reflects higher production costs associated with separated rare earth products compared with rare earth concentrate. Its ramp-up of output of magnetic precursor products will also lead to higher costs.
So overall higher revenues are expected to have been offset by elevated production costs, leading to a likely loss in the quarter.
MP’s Peer Performance Overview
Energy Fuels (UUUU - Free Report) is set to announce second-quarter 2025 results on Aug. 7. The Zacks Consensus Estimate for Energy Fuels’ second-quarter revenues is $9.40 million, indicating a 7.8% increase from the year-ago quarter. The estimate for Energy Fuels’ earnings has remained unchanged over the past 60 days at a loss of four cents per share. It indicates in-line results with the second quarter of 2024.
Lynas (LYSDY - Free Report) recently reported fourth-quarter fiscal 2025 results (ended June 30, 2025). Lynas achieved record NdPr production at 2,080 tons, exceeding the 2,000-ton mark for the first time. Total REO production was at 3,212 tons.
Lynas’s revenues grew 38% year over year to AUD$170.2 million ($110.61 million), with production levels continuing to be managed in line with the market demand.
MP’s Price Performance & Valuation
MP Materials shares have skyrocketed 319.4% so far this year compared with the industry’s 11.8% growth. In comparison, the Zacks Basic Materials sector has gained 8.3%, while the S&P 500 has risen 5.7% in the same period.
MP’s YTD Price Performance vs. Industry & Broader Sector
Image Source: Zacks Investment Research
MP Materials has also outpaced Energy Fuels and Lynas Rare Earths Limited, which have gained 89.7% and 89.4% year to date, respectively.
MP’s YTD Price Performance vs. UUUU & LYSDY
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 24.90X, a significant premium to the industry’s 1.24X. It has a Value Score of F.
Image Source: Zacks Investment Research
Energy Fuels and Lynas are cheaper options, trading at price-to-sales ratios of 23.39X and 12.13X, respectively.
MP’s Valuation vs. UUUU & LYSDY
Image Source: Zacks Investment Research
Investment Thesis on MP
MP Materials is the United States’ only fully integrated rare earth producer with capabilities spanning the entire supply chain, from mining and processing to advanced metallization and magnet manufacturing. The company has recently secured a multibillion-dollar investment package and long-term commitments from the Department of Defense (DOD), which will enable it to expand its production capacity and play a pivotal role in reducing the United States’ reliance on foreign sources, particularly China.
Should You Buy MP Materials Stock Now?
The company is making investments to boost its production capacity. Also, the DoD deal offers price and revenue stability in the long run. Investors holding MP shares should continue to do so to benefit from the solid long-term fundamentals of rare earth products. However, given its premium valuation and the expected loss in the quarter, prospective investors can wait for a better entry point.
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Should You Buy, Hold or Sell MP Materials Stock Ahead of Q2 Earnings?
Key Takeaways
MP Materials (MP - Free Report) is scheduled to announce its second-quarter 2025 results on Aug 7.
The consensus estimate for MP’s second-quarter revenues is $45.38 million, indicating a 45.17% increase from the year-ago quarter's reported figure of $31.26 million.
The Zacks Consensus Estimate for earnings is pegged at a loss of 16 cents per share. The estimate has moved down from a loss of 15 cents to the current loss of 16 cents over the past 60 days. MP Materials reported a loss of 17 cents per share in the year-ago quarter.
MP Materials’ Earnings Surprise History
MP Materials’ earnings missed the Zacks Consensus Estimates in three of the trailing four quarters and matched in one quarter. The company has a trailing four-quarter negative earnings surprise of 24.77%, on average.
What the Zacks Model Unveils for MP Stock
Our proven model does not conclusively predict an earnings beat for MP Materials this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: MP has an Earnings ESP of -8.97%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Have Shaped MP Materials’ Q2 Performance
MP Materials reported record production of neodymium and praseodymium (NdPr) reaching 563 metric tons in the first quarter, a 330% surge from the year-ago quarter. NdPr sales volumes were up 246% year over year to 464 metric tons, attributed to the shift to production of midstream products, mainly NdPr oxide.
REO production increased 10% year over year to 12,213 metric tons on higher recoveries from the continued implementation of Upstream 60K optimizations.
However, as MP Materials ramped up its midstream operations, much of the REO output was diverted to the production of separated rare earth products rather than being sold as concentrate. As a result, REO sales volumes dropped 33%, leading to a $10 million decline in rare earth concentrate revenues.
The Magnetics segment made its first metal deliveries in March and contributed revenues of $5.2 million in the quarter. We expect MP Material’s total revenues in the second quarter to reflect the above strength in NdPr production and a full-quarter contribution from the Magnetics segment.
In April, MP Materials halted rare earth concentrate shipments to China in response to Chinese tariffs and export controls, cutting off a revenue stream. Considering that this sale accounted for approximately 50% of the company’s revenues in the first quarter of 2025, this is expected to have been a headwind to its revenue performance during the second quarter.
MP Materials has experienced a significant jump in its costs of sales over the past year. In the first quarter, the cost of sales surged 37% due to higher production costs. Selling, general and administrative expenses were up 14% on higher employee headcount to support downstream expansion. The company’s strategy of producing and selling more separated products at Mountain Pass is likely to have led to higher costs. This reflects higher production costs associated with separated rare earth products compared with rare earth concentrate. Its ramp-up of output of magnetic precursor products will also lead to higher costs.
So overall higher revenues are expected to have been offset by elevated production costs, leading to a likely loss in the quarter.
MP’s Peer Performance Overview
Energy Fuels (UUUU - Free Report) is set to announce second-quarter 2025 results on Aug. 7. The Zacks Consensus Estimate for Energy Fuels’ second-quarter revenues is $9.40 million, indicating a 7.8% increase from the year-ago quarter. The estimate for Energy Fuels’ earnings has remained unchanged over the past 60 days at a loss of four cents per share. It indicates in-line results with the second quarter of 2024.
Lynas (LYSDY - Free Report) recently reported fourth-quarter fiscal 2025 results (ended June 30, 2025). Lynas achieved record NdPr production at 2,080 tons, exceeding the 2,000-ton mark for the first time. Total REO production was at 3,212 tons.
Lynas’s revenues grew 38% year over year to AUD$170.2 million ($110.61 million), with production levels continuing to be managed in line with the market demand.
MP’s Price Performance & Valuation
MP Materials shares have skyrocketed 319.4% so far this year compared with the industry’s 11.8% growth. In comparison, the Zacks Basic Materials sector has gained 8.3%, while the S&P 500 has risen 5.7% in the same period.
MP’s YTD Price Performance vs. Industry & Broader Sector
Image Source: Zacks Investment Research
MP Materials has also outpaced Energy Fuels and Lynas Rare Earths Limited, which have gained 89.7% and 89.4% year to date, respectively.
MP’s YTD Price Performance vs. UUUU & LYSDY
Image Source: Zacks Investment Research
MP is trading at a forward 12-month price/sales multiple of 24.90X, a significant premium to the industry’s 1.24X. It has a Value Score of F.
Image Source: Zacks Investment Research
Energy Fuels and Lynas are cheaper options, trading at price-to-sales ratios of 23.39X and 12.13X, respectively.
MP’s Valuation vs. UUUU & LYSDY
Image Source: Zacks Investment Research
Investment Thesis on MP
MP Materials is the United States’ only fully integrated rare earth producer with capabilities spanning the entire supply chain, from mining and processing to advanced metallization and magnet manufacturing. The company has recently secured a multibillion-dollar investment package and long-term commitments from the Department of Defense (DOD), which will enable it to expand its production capacity and play a pivotal role in reducing the United States’ reliance on foreign sources, particularly China.
Should You Buy MP Materials Stock Now?
The company is making investments to boost its production capacity. Also, the DoD deal offers price and revenue stability in the long run. Investors holding MP shares should continue to do so to benefit from the solid long-term fundamentals of rare earth products. However, given its premium valuation and the expected loss in the quarter, prospective investors can wait for a better entry point.