MP Materials, MP stock, rare earths, NdPr oxide, neodymium praseodymium, rare earth magnets, Pentagon deal, Apple partnership, DoD price floor, rare earth mining
MP Materials (MP) stock rose 8.4% in extended trading on Thursday after the rare earth firm’s second-quarter sales topped Wall Street’s estimates.
The Pentagon-backed company reported total revenue of $57.4 million for the quarter ended June 30, exceeding the $45.6 million expected by analysts, according to Fiscal.ai data. Its adjusted net loss of $0.13 per share also came in below Wall Street’s estimated $0.20 per share.
MP said its production of Neodymium-praseodymium (NdPr) oxide, used widely to make rare earth magnets that are used in everything from aircraft engines to wind turbines, more than doubled to 597 metric tons during the second quarter, while sales more than tripled year-over-year.
However, the company’s rare earth concentrate segment revenue declined as it stopped shipping materials to China following the onset of a brief trade war in April.
Retail sentiment on Stocktwits about MP was in the ‘neutral’ territory at the time of rating. The stock has gained over 20% more followers in the past month.
MP stock has surged over the past month, after inking deals with the Department of Defense and Apple. MP, the sole operator of a rare earth mine in the U.S., aims to capitalize on growing demand from the military and tech companies alike, who are seeking to reduce their reliance on China for critical minerals.
The agreement with the Pentagon has also established a $110 per kilogram price floor for NdPr oxide, significantly above the current market levels. Western companies have long argued that Chinese producers manipulate the market with excess supply.
“Beginning in Q4, we will begin benefiting from the DoD price floor agreement with first cash payments likely to be received in Q1,” Chief Financial Officer Ryan Corbett said on a call with analysts.
The twin agreements with Apple and the DoD would also help the company to build a new magnet-making facility in Texas and expand other operations. MP executives also stated that the agreement with the Pentagon does not prevent them from selling to other countries, except those designated as “hostile.”
“This stock has fantastic downside protection and massive upside potential,” one retail trader said.
Another user wrote that the stock could hit $150 in no time.
MP stock has risen nearly 350% this year.
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