TLDR
- MP Materials reported better-than-expected Q2 results with Ebitda loss of $12.5 million versus expected $20 million, on sales of $57.4 million
- Stock hit new all-time highs, up 10% in premarket trading to $78.17 after earnings beat
- Company stopped selling rare-earth concentrate to Chinese customers but increased domestic magnet sales to $19.9 million
- Defense Department deal provides pathway to $650 million annual Ebitda by end of decade through $400 million equity investment
- Stock has gained roughly 200% over past three months as Wall Street price targets jumped from $27 to $60
MP Materials delivered another earnings surprise Thursday, sending shares to fresh record highs as the rare-earth company continues its remarkable run. The stock jumped 10% in premarket trading to $78.17 after reporting better-than-expected second-quarter results.
The company posted an Ebitda loss of $12.5 million on sales of $57.4 million. Wall Street had expected a much larger loss of about $20 million on sales of roughly $46 million.
The earnings beat represents a clear improvement from the year-ago period. MP reported an Ebitda loss of about $27 million on sales of roughly $31 million in Q2 2024.
$MP Materials Q2’25 Earnings Highlights
🔹 Adj. EPS: $(0.13) (Est. $(0.18)) 🟢
🔹 Revenue: $57.4M (Est. $46.3M) 🟢; UP +84% YoY
🔹 Adj. EBITDA: $(12.5M); improved from $(27.1M) YoY
🔹 Net Loss: $(30.9M); improved from $(34.1M) YoY
🔹 Adj. Net Loss: $(21.4M); improved from…— Wall St Engine (@wallstengine) August 7, 2025
Revenue jumped 84% year-over-year, driven by strategic shifts in the business. The company made a deliberate choice to stop selling rare-earth concentrate to Chinese customers.
This move initially concerned investors about near-term revenue impacts. However, MP more than made up for the lost Chinese sales through increased domestic operations.
Defense Department Deal Transforms Outlook
The real driver behind MP’s stock surge isn’t current earnings but future potential. In July, the Pentagon agreed to a transformational $400 million equity investment in the company.
The Defense Department also committed up to $350 million in additional funding plus a $150 million loan. This money will fund construction of a new domestic rare-earth magnet manufacturing facility.
The deal also supports expansion of MP’s current mining and processing capabilities at its Mountain Pass mine in California. The facility represents the largest rare-earth mining operation in the Western Hemisphere.
China currently dominates global rare-earth production with an estimated 85% of refining capacity. The Defense Department has long sought to reduce American dependence on Chinese suppliers.
Rising trade tensions between the U.S. and China appear to have accelerated these plans. The Pentagon’s investment provides MP a clear pathway forward.
Magnets Business Shows Promise
The agreement creates a pathway to roughly $650 million in annual Ebitda by the end of the decade. That’s a dramatic change from the projected $20 million Ebitda loss expected in 2025.
MP’s magnetics segment already shows positive momentum. The division generated positive Ebitda of $8.1 million on sales of almost $20 million in Q2.
The company didn’t produce any magnets from its rare-earth materials in the second quarter of 2024. The $19.9 million in magnet revenue represents entirely new business.
MP has secured supply agreements beyond the Defense Department. The company also has deals with Apple and General Motors for rare-earth materials.
Investors will want to hear more details about expanding beyond military applications. The civilian market for rare-earth materials continues growing as electric vehicles and renewable energy demand increases.
The stock’s recent gains have pushed valuation metrics higher. MP shares currently trade at roughly 30 times estimated 2027 Ebitda.
Australian competitor Lynas Rare Earths trades at about half that multiple. The premium suggests investors expect MP’s strategic position to generate additional business opportunities.
MP stock closed Thursday up 5.3% at $71.07 ahead of the earnings release. The broader market declined, with the S&P 500 falling 0.1% and the Dow dropping 0.5%.
The company has gained roughly 200% over the past three months as Wall Street price targets jumped from $27 to $60. Current quarterly results show progress toward the Defense Department’s ambitious Ebitda projections.
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