MP estimates that it is expected to turn losses into profits this quarter, and its stock price will soar, boosting the popularity of rare earth concept stocks
MP Materials, the largest rare earth miner in the West, announced a smaller-than-expected loss in the third quarter (July-September) and predicted that it is expected to turn a profit in Q4 as scheduled. The stock price rebounded strongly in response.
Barron’s, the Wall Street Journal and other foreign news reports, MP Materials announced its Q3 financial report after the US stock market closed on the 6th: revenue fell 15% year-on-year to US$53.6 million; excluding one-time items, the industry's loss per share came to US$0.10. According to a FactSet survey, analysts had originally forecast Q3 revenue and industry loss per share of US$53.2 million and US$0.17.
(Source: MP Materials)
During Q3, MP stopped exporting to China in compliance with the U.S. government's supply chain regulations, resulting in the revenue from rare earth concentrates returning to zero, which further reduced overall revenue by 15%.
In addition, the actual transaction value of Q3 neodymium praseodymium oxide was approximately US$59 per kilogram, which was higher than the one-year price of US$48. The price of this product is expected to continue to rise and may exceed US$100 per kilogram in the next few years.
MP CEO James Litinsky said that the major agreement signed by the company with the Pentagon will be implemented this quarter (October-December), preparing to accelerate the production of magnets in the United States, and the visibility of free cash flow will also improve.
MP predicts that the company is expected to turn a profit from Q4. MP also stated on the earnings call that the heavy rare earth separation facility at its Mountain Pass mine will be put into pilot operation in 2026.
MP Materials soared 12.8% to close at US$58.6 after hearing the news on the 7th; from October 15th to November 6th, the stock price fell as much as 47.34%.
Other rare earth concept stocks rose simultaneously. USA Rare Earth, Trilogy Metals, and Energy Fuels jumped 9.73%, 2.27%, and 3.51% respectively on the 7th.
