What Should be Your Stance on MP Stock Ahead of Q4 Earnings?

MP Materials MP is scheduled to announce its fourth-quarter 2025 results on Feb. 26, after market close.

The consensus estimate for MP’s fourth-quarter revenues is $59.60 million, indicating a 2.3% decline from the year-ago quarter. The Zacks Consensus Estimate for earnings is pegged at four cents per share. The estimate has moved down 60% over the past 60 days. MP Materials reported a loss of 12 cents per share in the year-ago quarter.

MP Materials’ Earnings Surprise History

MP Materials’ earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, matched in one quarter and missed the same in one quarter. The company has a trailing four-quarter earnings surprise of 8.03%, 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. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat. This is not the case, as you can see below.

You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Earnings ESP: MP has an Earnings ESP of -127.27%. 

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’ Q4 Performance

MP Materials has delivered strong rare earth production growth, posting record NdPr volumes in the first three quarters of 2025. Third-quarter neodymium-praseodymium (NdPr) output reached 721 MT, up 51% year over year and above the prior quarterly record of 597 MT in Q2. For the first nine months of 2025, NdPr production totaled 1,881 MT, up 114% year over year and already surpassing full-year 2024 output of 1,294 MT.  NdPr production volumes continue to rise as process optimization and ramp-up efforts progress.

Rare Earth Oxide (REO) production declined 4% year over year to 13,254 MT in the third quarter of 2025 but remained the company’s second-highest quarterly level. With MP Materials ramping up its midstream operations, much of the REO output is being diverted to the production of separated rare earth products rather than being sold as concentrate. Sales volumes of REOs thus have been trending lower.

We expect the momentum in NdPr production to have continued in the fourth quarter, resulting in higher sales volumes. This, along with higher NdPr prices, is expected to have boosted the Materials segment’s revenues. The Magnetics segment made its first metal deliveries in March and the ramp-up at the segment is expected to have contributed to revenues in the quarter. 

However, in April 2025, 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 previously, this is expected to have been a headwind to its revenue performance during the fourth quarter.

MP Materials had been reporting adjusted losses for eight straight quarters, reflecting cost pressures as it advances its downstream expansion strategy. Producing separated products is more costly than producing rare earth concentrates due to the additional processing required. These additional costs pertain to chemical reagents, employee labor, maintenance expenses and consumables.  In the first nine months of 2025, the cost of sales was up 10% from the year-ago period. 

During this period, the increase in costs also reflects the production of magnetic precursor products, specifically neodymium-praseodymium (NdPr) metal at its Independence Facility. As the company expanded its workforce to support the downstream expansion, selling, general and administrative (SG&A) expenses have also surged. 

Despite these near-term challenges, MP Materials is expected to have returned to profitability starting in the fourth quarter of 2025. With the United States Department of War’s (DoW) Price Protection Agreement commencing on Oct. 1, 2025, it is expected to have provided revenue stability and helped offset the cost headwinds.

MP’s Price Performance & Valuation

MP Materials shares have gained 128% in a year compared with the industry’s 52.4% growth. In comparison, the Zacks Basic Materials sector has gained 47.2%, while the S&P 500 has risen 18.2% in the same period.

Meanwhile, peers Energy Fuels UUUU and Lynas Rare Earths Limited LYSDY, have gained 368% and 155% in a year, respectively.

MP is trading at a forward 12-month price/sales multiple of 20.81X, a significant premium to the industry’s 1.31X. It has a Value Score of F. Energy Fuels and Lynas are trading at price-to-sales ratios of 46.16X and 13.20X, respectively.

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’s multibillion-dollar investment package and long-term commitments from the DoW 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, prospective investors can wait for a better entry point.

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

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