MP Materials Races Ahead in U.S. Magnet Manufacturing: Can It Deliver?

MP Materials MP commenced commercial production of neodymium-praseodymium (NdPr) metal and trial production of automotive-grade, sintered neodymium-iron-boron (NdFeB) magnets in late 2024 at its Independence facility in Fort Worth, TX. This made MP the first company in decades to establish an integrated U.S. mine-to-magnet supply chain, which is considered a critical component for electric vehicles and other technologies.

The company’s Magnetics segment, which operates the flagship Independence facility, represents its downstream magnet manufacturing. The segment made the first sales of magnetic precursor products, including NdPr metal, to General Motors GM per the long-term agreement signed between the parties in 2022.

Revenues for the Magnetics segment were first recognized in the first quarter of 2025 at $5.1 million and $19.9 million in the second quarter. Adjusted EBITDA for the segment was $0.5 million in the first quarter, followed by $8.1 million in the second quarter. 

Per the agreement, MP Materials has already received prepayments from General Motors of $100 million in 2024 and $50 million in April 2025 for magnetic precursor products. Currently, General Motors is the segment’s only customer. It is also pursuing sales opportunities to other customers for its future magnet products.

The United States has so far relied almost entirely on foreign sources for these inputs. MP Materials plans to lower this reliance by building the facility, which is America’s first fully integrated rare earth metal, alloy and magnet manufacturing facility. The company anticipates manufacturing NdFeB permanent magnets by the end of 2025. It has the capacity to produce approximately 1,000 metric tons of finished NdFeB magnets annually. 

In July, MP Materials announced a landmark long-term agreement with Apple AAPL to supply rare earth magnets manufactured entirely from recycled materials. MP Materials will produce the magnets at the Independence facility using recycled rare earth feedstock processed at its Mountain Pass site in California. The feedstock will be sourced from post-industrial and end-of-life magnets. 

This is in sync with MP Materials and Apple’s long-standing endeavors to create sustainable, domestic supply chains. Apple and MP Materials have collaborated over the past five years to develop advanced recycling technology that enables recycled rare earth magnets to be processed into material that meets Apple’s rigorous standards. 

MP Materials, in July, entered into a strategic partnership with the United States Department of Defense (DoD) to accelerate the building of an end-to-end U.S. rare earth magnet supply chain. Among other things, the company remains committed to expanding the Independence facility to a projected 3,000 MTs of magnets annually and to start construction of the planned 10X Magnet Manufacturing facility. It will take MP Materials’ total U.S. rare earth magnet manufacturing capacity to an estimated 10,000 metric tons and will cater to both the defense and commercial sectors.

MP’s Price Performance, Valuation & Estimates

MP Materials shares have skyrocketed 322.7% so far this year compared with the industry’s 21.5% growth. During this time, the Basic Materials sector has risen 21%, while the S&P 500 has gained 12.8%.

MP is trading at a forward 12-month price/sales multiple of 23.34X, a significant premium to the industry’s 1.18X.

The Zacks Consensus Estimate for MP Materials’ 2025 earnings is pegged at a loss of 34 cents per share. The estimate for 2026 is pegged at a profit of 91 cents per share, indicating a solid improvement. The estimates for both 2025 and 2026 have moved up in the past 60 days, as shown below.

The company currently carries a Zacks Rank #2 (Buy). 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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