MP Long

The Big Idea

MP Materials (NYSE: MP) is the lone heavyweight in the U.S. rare-earth market a near-monopoly poised to capitalize on skyrocketing demand for magnets used in electric vehicles, smartphones, and defense systems. The companys Mountain Pass mine just smashed production records and is deep into building out the rest of the rare-earth supply chain (including its own motor-grade magnet factory in Texas). In short, MP has become the strategic linchpin for U.S. critical-minerals security. After a huge run in 2025 (driving the stock toward its all-time highs), MP is now in a healthy pullback, trading right at its 200-day moving average (~$55.65). This $55058 band offers a sweet spot to buy before the next leg up. With major production ramps and government-backed contracts right around the corner, we see MP as primed for a rebound back into the low-$60s.

Whats Changed / Why Now

Until recently, MP was on a tear  2025 saw nearly unprecedented growth: Q3 2025 revenue jumped 51% year-over-year driven by record rare-earth output. Management even signaled that Mountaint Pass is finally on the verge of turning cash-flow positive (Q4 2025 should see profitability). In other words, the worst may be over. Yet this strong momentum bumped up the stock into overbought territory. Over the past month mid-February 2026, MP has pulled back roughly 1516%, brushing up against its long-term support line (the 200-day SMA around $5556).

This correction looks normal (even healthy) after such a steep rise. Crucially, fundamental momentum hasnt reversed  in fact, its accelerating. Production volumes are surging (Q3 rare-earth output +51% YoY), and the company has locked in major deals that only kick in now. For example, a new Department of War (Pentagon) supply agreement and an Apple magnet supply contract will start generating cash any day. We believe investors are simply catching their breath here, while bulls quietly eye outdoor dirt at the base of the 200-day line.

Technically speaking, MPs $5558 range is now support. The 50-day MA was earlier resistance near ~$60 and has flipped. And the 200-day MA ($55.65) is serving as floor. Buying near this base is a lower-risk entry with a clear invalidation point (below ~$52.50). All that remains is a catalyst to reignite the rally  and that catalyst is imminent.

Catalysts Ahead

• Q4 2025 Earnings (Feb 2026): MPs next earnings report should show another quarter of explosive growth. Management guided to profitability in Q4 2025, meaning EPS will swing positive. Given last quarters upside (and continuing ramp at the mine and magnet plant), a strong beat is likely, giving investors fresh reason to buy.
• Heavy Rare-Earth Ramp (Mid-2026): MP is on track to commission a brand-new separation plant at Mountain Pass by mid-2026, specifically to process heavy rare earths (Dysprosium, Terbium) into magnet feedstock. This is huge  it means MP becomes a one-stop shop for virtually all rare-earth needs in the U.S., supplying both light (NdPr) and heavy rare earths for the first time. Once online, this will dramatically boost output and margins, pressuring the stock higher as Wall Street marks up the long-term valuation.
• Magnet Factory Output: Last year MP restarted its Independence magnet facility in Texas for the first time in years. By year-end, it expects first commercial output of neodymium-iron-boron magnets. This means MP not only mines ore but is now selling finished magnets for EV motors and defense systems. Expect continued ramp and new sales announcements over the next few months.
• Government/Industry Tailwinds: U.S. policy is aggressively betting on MP. Recent legislation (IRA, CHIPS Act, defense bills) funnels billions into domestic critical minerals. MPs CEO has noted that key Pentagon/DoW contracts are kicking in now, which provides a guaranteed customer base (and partial subsidization). Separate news suggests bipartisan support to seed a $2.5B rare-earth development agency.
• EV & Tech Demand: Underpinning all of this is relentlessly rising demand for NdPr magnets. Every new EV, smartphone, and jet fighter needs rare-earth permanent magnets. Even if EV growth temporarily slows, forecasts assume demand staying strong for years. MP is the #1 Western source of NdPr  any tightening of supply globally should lift MPs pricing power.

Numbers That Matter

Record Production: In Q3 2025, Mountain Pass delivered a record 721 metric tons of NdPr oxide, up 51% YOY. This is the highest quarterly output in the companys history. With the processing plant running near capacity and new capacity coming, production should only increase from here.

Rising Revenues: MP generated $53.6M in consolidated revenue in Q3, largely from selling rare-earth concentrate. Since early 2024, it has roughly tripled output, and revenues are on the same trajectory. Thanks to improved prices and scale, management now expects Q4 to hit positive EBITDA and income.

Magnet Segment Growth: The Independence magnet factory pulled in $21.9M of revenue in Q3 and about $9.5M of Adjusted EBITDA. In other words, MPs vertical integration is already contributing substantial top-line dollars. As magnet production ramps to automotive-grade output in 2026, that segments revenue could easily double.

Scarcity/Valuation: MP controls one of the few scalable rare-earth mines outside China. (In fact, its widely cited as the only U.S. rare-earth mine servicing EV/tech industries.) Given the secular bull case for rare-earths, MPs high P/S (~43x) still looks justified if growth continues. Our base-case target is only around $62.50, which is just ~45x next years modest sales estimates  hardly a stretch if volumes keep climbing.

Technical / Price-Action Context

After dancing around $80100 in early 2025, MP entered a rounding top/consolidation phase, falling to the high-$50s by early Feb 2026 (from a 52-week high of ~$100). The current pullback is actually healthy: at ~$56.6, the stock sits slightly above its 200-day MA ($55.65)  a classic support zone for a mean-reversion bounce. Simplified signal: buy on the dip, because were still in a long-term uptrend. The proposed entry zone ($5558) tightly brackets that 200-day level.

If MP holds this zone, the path to the target (~$62.5) is clear: the 20-day MA is ~61.94, which also lines up with prior consolidation in the low-60s. In effect, a move back above $60 would break the short-term downtrend and likely trigger fresh momentum buying. Our stop is set at $52.40, just under the 200-day MA  a level which if broken decisively would invalidate the mean-reversion thesis (and suggest a further downtrend).

In short, MP is carving out a textbook pullback to a long-term moving average after a parabolic climb. This is a high-probability bounce zone: risk is well-defined below $52.4, reward is healthy to ~$62.5. And the technicals mesh with the fundamental story: support at critical supply (MB production) levels should give way to the next push higher.

Risks & What Could Go Wrong

• Continued Pullback: As of today, MP is down ~16% over 30 days. Its possible the downtrend isnt over  weakness in commodity stocks can be persistent. If broader markets or the metals sector turn negative (e.g. on recession fears), MP could slip further. A decisive close below the 200-day moving average would be a bearish sign.
• Policy Shifts/Geopolitics: Rare-earth stocks are notoriously sensitive to headlines. Any setback in U.S. funding for critical minerals (or a cooling of U.S.-China tensions reducing supply constraints) could dampen enthusiasm. For example, if competitors like USA Rare Earth get big government subsidies, MP might face more competition.
• Execution Risks: MP is still technically unprofitable and in heavy capex mode. Building new processing plants and ramping magnet production is complex. Delays or cost overruns in the new heavy-RE plant or magnets factory could hurt margins and momentum.
• Valuation Risk: The stock trades at a sky-high P/E (or P/S) relative to almost any old-economy miner. If growth disappoints or if long-term demand for EVs/tech slows, the multiple could compress, meaning $62.50 feels lofty.
• Market Sentiment: Hedge funds and shorts have circled MP at times (short-volume recently spiked ~58% of trading volume). A change in sentiment (market rotation out of green tech winning stocks) could swing the stock either way quickly.

Bottom Line

MP Materials is a prime example of a strategic, policy-driven story stock that also shows real fundamental progress. Its pullback into the $5558 zone looks more like a buying opportunity than a trend change. The setup: buy just above the 200-day moving average where support is likely, target the mid-$60s where resistance and short-term overbought levels converge (20-day MA, prior highs).

What makes this trade compelling is not just technical  its the confluence of upcoming catalysts. MP is already delivering record rare-earth output and is just weeks away from turning profitable. On top of that, its whole business is about to take off: new heavy-RE production (Dy/Tb) in 2026, full-scale magnet manufacturing on deck, and locked-in government customers. Those drivers could carry the stock well past our $62.50 target.

Were 75% confident in this trade (like any trade theres risk, see above), but at the very least, MP in this price band is a low-risk, high-reward bet on Americas rare-earth renaissance. Bottom line: We like MP at current levels and expect a rally back to the low 60s.

Not financial advice  just our high-conviction view.

Sources

• MP Materials  Third Quarter 2025 Results (BusinessWire press release)
• MP Materials  Second Quarter 2025 Results (BusinessWire press release)
• MP Materials  Strategic Update on U.S. Rare Earth Supply Chain (news release)
• MP Materials  Restoring U.S. Rare Earth Magnet Production (news release)
• AP News  Americas only rare earth producer gets a boost from Apple and Pentagon agreements (July 15, 2025)