Is MP Stock a Buy, Hold or Sell After Its 98.9% Six-Month Rally?

Core Insights - MP Materials (MP) shares have increased by 98.9% over the past six months, significantly outperforming the industry growth of 11.8%, the Zacks Basic Materials sector's rise of 11.8%, and the S&P 500's gain of 15.9% [2] - The stock's surge is attributed to key developments, including agreements with the U.S. Department of War (DoW) to enhance the domestic rare earth magnet supply chain, a long-term deal with Apple for recycled rare earth magnets, and strong production figures in Q2 and Q3 of 2025 [3][7] Stock Performance - MP Materials has outperformed Lynas Rare Earths Limited (LYSDY), which saw a 49.5% increase, but has underperformed Energy Fuels (UUUU), which gained 175.6% in the same timeframe [5][6] Strategic Partnerships - In July, MP Materials secured a long-term agreement with Apple to supply rare earth magnets made from recycled materials, developed through advanced recycling technology [9] - MP also partnered with the DoW to expedite the development of a domestic rare earth magnet supply chain and announced a joint venture with the Saudi Arabian Mining Company (Maaden) to establish a rare earth refinery in Saudi Arabia [10] Production Numbers - MP Materials reported record neodymium and praseodymium (NdPr) production of 721 metric tons in Q3, a 51% increase year-over-year, surpassing the previous record of 597 metric tons in Q2 [11] - Total NdPr production for the first nine months of 2025 reached 1,881 metric tons, 114% higher than the previous year, exceeding the full-year 2024 target of 1,294 metric tons [12] - Rare Earth Oxide (REO) production decreased by 4% year-over-year to 13,254 metric tons in Q3, marking the second-highest quarter in the company's history [13] Earnings Estimates - The Zacks Consensus Estimate projects MP Materials' revenues to grow by 13.66% year-over-year in 2025 and by 79% in 2026, with current earnings estimates indicating a loss of 21 cents per share for 2025 and a potential turnaround to earnings of 69 cents per share in 2026 [14][16] Valuation Metrics - MP Materials is trading at a forward 12-month price/sales multiple of 25.41X, significantly higher than the industry's 1.44X, indicating a premium valuation [17] - Comparatively, Energy Fuels trades at 40.39X, while Lynas is at 11.11X [18] Long-term Outlook - MP Materials operates the Mountain Pass Rare Earth Mine and Processing Facility, the only large-scale rare earth mining and processing site in North America, essential for clean-tech technologies [19] - The company is set to benefit from a multibillion-dollar investment package and long-term commitments from the DoW, including the construction of a second domestic magnet manufacturing facility [21] - The partnership with Apple is expected to significantly enhance MP's recycling platform and magnet production capabilities [21] Conclusion - MP Materials' strong positioning in the U.S. supply chain, operational ramp-up, and strategic partnerships suggest a robust growth trajectory [22] - Current investors are encouraged to hold shares, while new investors may consider waiting for a more favorable entry point due to premium valuations and recent downward earnings estimate revisions [23]