MP vs. USAR: Which Rare-Earth Play Looks Stronger Right Now?

Core Insights - MP Materials and USA Rare Earth, Inc. are pivotal U.S. companies in the rare-earth metals sector, essential for high-performance magnets in EVs, defense, and high-tech applications, with a focus on reducing reliance on China for supply [1][3]. Group 1: Company Overview - MP Materials is the only fully integrated rare earth producer in the U.S., covering the entire supply chain from mining to magnet manufacturing, with a market capitalization of $9.8 billion [2]. - USA Rare Earth, valued at approximately $1.70 billion, is developing a sintered neo magnet manufacturing facility expected to commence production in early 2026 [2]. Group 2: MP Materials' Developments - MP Materials operates the Mountain Pass Rare Earth Mine, the only large-scale rare earth mining and processing site in North America [4]. - In July, MP secured a significant deal with the U.S. Department of War to expedite the development of a domestic rare earth magnet supply chain, including equity investments and loan financing [5]. - MP plans to construct a new magnet manufacturing facility, increasing U.S. capacity to 10,000 metric tons, and aims to extend the lifespan of Mountain Pass through exploration and enhanced processing [6]. Group 3: Financial Performance of MP Materials - In Q3 2025, MP's revenues fell 14.9% year-over-year to $53.6 million due to withholding sales to China, despite a record production of 721 metric tons of NdPr, a 51% increase year-over-year [8][9]. - The company reported an adjusted loss of $0.10 per share, an improvement from a loss of $0.12 in the previous year, and ended the quarter with $1.15 million in cash [12]. - MP anticipates a return to profitability by 2026, despite rising costs impacting short-term results [13]. Group 4: USA Rare Earth's Strategy - USA Rare Earth is developing a rare earth magnet manufacturing plant in Stillwater, OK, and holds mining rights to the Round Top Mountain deposit, although it has not yet begun extraction [15]. - The company has not generated any revenues since inception, reporting a loss of $0.25 per share in Q3 2025, with cash reserves of $258 million and no significant debt [17]. - USA Rare Earth acquired LCM, a UK-based manufacturer, to enhance its mine-to-magnet strategy, establishing a comprehensive rare earth supply chain [18]. Group 5: Comparative Analysis - MP Materials has a more established operational profile with active production and strategic partnerships, while USA Rare Earth is still in the development phase with no current revenues [29]. - MP's stock has gained 254.3% this year, compared to USA Rare Earth's 6.6% increase, indicating stronger market performance [28]. - Both companies are ranked 3 (Hold) by Zacks, but MP is viewed as the better investment choice due to its clearer path to profitability and operational maturity [29][30].