Should You Buy, Sell or Hold MP Stock Before Q2 Earnings Release?

Image Source: Zacks Investment Research

MP Materials’ Earnings Surprise History

MP Materials’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters. The company has a trailing four-quarter earnings surprise of 144.3%, 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. 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 -72.73%. 

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 has maintained strong operational momentum since 2025. In the first quarter of 2026, the company produced a record 917 metric tons (MT) of neodymium-praseodymium (NdPr), up 63% year over year. Rare earth oxide (REO) concentrate production also reached a record 12,983 MT, rising 6% year over year on improved recoveries and operational efficiencies. Production of magnetic precursor products continued to ramp up at the Independence facility.

NdPr sales also hit a record 1,006 metric tons in the first quarter, a 117% increase year over year.  This robust production and sales growth led to the Materials segment’s revenues climbing 30% year over year to $72.2 million. 

We expect this momentum to have continued in the second quarter. Higher NdPr production, improved pricing and stronger sales volumes likely supported the Materials segment’s revenues. The Magnetics segment is also expected to have contributed more meaningfully as production of magnetic precursor products increased. In addition, the company is expected to have recognized income related to its price protection agreement (PPA) with the Department of War (DoW).

However, cost pressures remain a key challenge, as MP advances its downstream expansion strategy. Producing separated rare earth products and magnetic materials involves significantly higher costs than concentrate production, due to additional processing requirements, chemical inputs, labor and maintenance. Cost of sales is expected to have been higher in the second quarter, reflecting increased sales of NdPr oxide and metal, along with added costs associated with magnetic precursor products. Ongoing investments in downstream capabilities are likely to have kept SG&A expenses high, maintaining pressure on near-term margins. 

MP’s Price Performance & Valuation

MP Materials shares have declined 33% in a year against the industry’s 35.2% growth. In comparison, the Zacks Basic Materials sector has gained 25.8%, while the S&P 500 has risen 23.2% in the same period.

Meanwhile, peers Energy Fuels UUUU and Lynas Rare Earths Limited LYSDY have gained 25% and 31.5% in a year, respectively.

Image Source: Zacks Investment Research

MP is trading at a forward 12-month price/sales multiple of 12X, a significant premium to the industry’s 1.42X. Energy Fuels and Lynas are trading at price-to-sales ratios of 15.86X and 8.9X, respectively.

Image Source: Zacks Investment Research

Investment Thesis on MP

MP Materials remains the only fully integrated U.S. rare earth producer, with capabilities spanning mining, processing, metallization and magnet manufacturing. The company continues expanding operations at its Independence facility while advancing construction of the 10X magnetics campus. It is also preparing to commission scaled heavy rare earth separation at Mountain Pass. Once completed, the 10X facility is expected to increase MP's integrated U.S. rare-earth magnet manufacturing capacity to roughly 10,000 metric tons annually, strengthening domestic supply of these strategically important materials and enhancing the company's long-term growth prospects.

Should You Buy MP Materials Stock Now?

MP Materials remains well-positioned to benefit from the growing demand for domestically produced rare earth materials and magnets, supported by its integrated business model, expanding production capabilities and significant long-term capacity investments. These strengths make the company an attractive long-term holding for existing shareholders.

However, the stock's premium valuation, elevated operating and start-up costs, and an unfavorable Earnings ESP ahead of the upcoming release suggest that new investors may be better served waiting for a more attractive entry point or greater post-earnings clarity before initiating a position.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research