MP Materials Stock Gains Momentum from Strategic Government Support

MP Materials US5533681012

Shares of MP Materials have continued their robust performance into January, trading above $70 in after-hours activity. The stock has surged more than 36% year-to-date, significantly outpacing the broader market. This momentum is fueled by substantial government backing, key strategic partnerships, and the company's elevated role in U.S. national security concerning critical minerals.

A pivotal shift for MP Materials came with its designation as a strategically vital entity for national security. The U.S. Department of Defense has committed to a ten-year offtake agreement for neodymium-praseodymium (NdPr) products, guaranteeing a minimum price floor of $110 per kilogram. This provides the mining operator with an exceptional degree of revenue predictability.

The core components of this government partnership include:

• A $400 million direct investment from Washington, making the U.S. government the largest shareholder.
• The decade-long NdPr purchasing agreement with its established price guarantee.
• Development of a magnet manufacturing facility in Texas, co-financed by Pentagon funds.
• A separate $500 million partnership with Apple focused on producing recycled rare-earth magnets.

The company is also expanding its global footprint. In November 2025, MP Materials announced a joint venture with Saudi Arabian Mining Company (Ma’aden) and the U.S. Department of Defense to build a rare-earth refining facility. Ma’aden will hold a 51% stake, with MP Materials and the Pentagon collectively owning 49%. This agreement extends processing capabilities beyond U.S. borders and serves as a hedge against potential domestic supply chain constraints.

Market Valuation and Analyst Perspective

On January 13, 2026, William Blair initiated coverage of the stock with an "Outperform" rating. The consensus price target among analysts stands at $79.08, with a high-end target of $94. Currently, all covering analysts rate the shares as a "Buy."

The valuation, however, appears ambitious. The company commands a market capitalization of approximately $12 billion despite not yet achieving sustained profitability. Key financial metrics highlight this:

• Price-to-Sales Ratio: 49.36
• Price-to-Book Ratio: 6.22
• Enterprise Value: $11.28 billion
• Trailing Earnings Per Share: -$0.70

For the third quarter of 2025, MP Materials reported revenue of $53.55 million and a net loss of $17.84 million. Nevertheless, a five-year average annual revenue growth rate of 15% demonstrates the business's steady expansion amid fluctuating commodity prices.

Legislative Tailwinds and Trading Volatility

Further support stems from proposed legislation. U.S. lawmakers have introduced a bill to create a $2.5 billion national stockpile of critical minerals. This move reinforces the strategic importance of domestic rare-earth production and could generate additional demand for MP Materials' output.

The stock's performance over the past twelve months underscores the sector's inherent volatility. Shares have traded in a wide range from $18.64 to $100.25. The peak above $100 in October 2025 followed the Pentagon agreements, while the low in May 2025 preceded the crucial government deals. An average daily trading volume of around 10 million shares indicates strong institutional interest alongside pronounced price swings.

Persistent Risks Amid Positive Catalysts

Despite powerful backing from state and corporate partners, significant uncertainties remain:

• Industrial-scale production of heavy rare-earth elements is scheduled only for mid-2026 and remains unproven.
• China's dominance over the vertically integrated supply chain continues to exert pressure on global pricing.
• The timeline to profitability remains unclear despite consistent revenue growth.
• The full capital expenditure required for complete magnet manufacturing has not been fully disclosed.

The equity currently trades well above its 200-day moving average, suggesting intact technical momentum. The critical factor for its future trajectory will be whether MP Materials can successfully execute its planned production targets and expansion projects throughout 2026, thereby meeting the high expectations now priced into the stock.