MP Materials (NYSE:MP) Hits New 52-Week Low - Time to Sell?

Key Points

• MP Materials fell to a new 52-week low of $39.91, well below its 50-day and 200-day moving averages of $55.79 and $58.63, respectively.
• Despite the decline, analyst sentiment remains broadly positive: MarketBeat reports a consensus “Buy” rating and an average price target of $79.42, although some firms have recently lowered targets and one downgraded the stock to “Sell.”
• The company’s latest quarter exceeded expectations, with revenue up 49.1% year over year and EPS beating estimates, but MP Materials remains unprofitable with a negative net margin and P/E ratio.

MP Materials Corp. (NYSE:MP - Get Free Report) hit a new 52-week low on Wednesday . The stock traded as low as $39.91 and last traded at $41.2840, with a volume of 7075535 shares. The stock had previously closed at $43.13.

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on MP. Wall Street Zen downgraded MP Materials from a "hold" rating to a "sell" rating in a research report on Saturday. Citigroup reiterated a "positive" rating on shares of MP Materials in a research note on Wednesday, July 15th. Needham & Company LLC lowered their price target on shares of MP Materials from $81.00 to $73.00 and set a "buy" rating for the company in a report on Wednesday, July 22nd. Canaccord Genuity Group set a $82.00 price objective on shares of MP Materials in a research report on Friday, May 8th. Finally, Deutsche Bank Aktiengesellschaft reduced their price objective on shares of MP Materials from $70.00 to $61.00 and set a "buy" rating on the stock in a report on Thursday, July 9th. Two analysts have rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the stock has a consensus rating of "Buy" and an average price target of $79.42.

MP Materials Stock Performance

The firm has a 50 day moving average of $55.79 and a two-hundred day moving average of $58.63. The company has a debt-to-equity ratio of 0.47, a current ratio of 7.18 and a quick ratio of 6.58. The stock has a market cap of $7.35 billion, a PE ratio of -98.30 and a beta of 1.86.

MP Materials (NYSE:MP - Get Free Report) last announced its quarterly earnings results on Thursday, May 7th. The company reported $0.03 EPS for the quarter, beating the consensus estimate of ($0.01) by $0.04. MP Materials had a negative net margin of 28.00% and a negative return on equity of 2.27%. The company had revenue of $90.65 million for the quarter, compared to analyst estimates of $74.82 million. During the same period in the prior year, the firm posted ($0.12) earnings per share. The firm's revenue was up 49.1% on a year-over-year basis. Research analysts predict that MP Materials Corp. will post 0.05 EPS for the current fiscal year.

Insider Activity

In related news, CEO James H. Litinsky sold 234,651 shares of MP Materials stock in a transaction on Thursday, May 28th. The shares were sold at an average price of $65.87, for a total transaction of $15,456,461.37. Following the sale, the chief executive officer directly owned 11,855,965 shares in the company, valued at $780,952,414.55. This trade represents a 1.94% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, COO Michael Stuart Rosenthal purchased 17,000 shares of MP Materials stock in a transaction that occurred on Wednesday, May 20th. The stock was bought at an average cost of $56.62 per share, with a total value of $962,540.00. Following the completion of the transaction, the chief operating officer owned 1,333,673 shares of the company's stock, valued at $75,512,565.26. The trade was a 1.29% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. In the last quarter, insiders sold 905,167 shares of company stock worth $60,161,837. Corporate insiders own 8.20% of the company's stock.

Institutional Trading of MP Materials

Hedge funds and other institutional investors have recently made changes to their positions in the company. EMC Capital Management purchased a new stake in shares of MP Materials in the 4th quarter valued at about $25,000. Whittier Trust Co. of Nevada Inc. purchased a new position in MP Materials during the 4th quarter worth approximately $26,000. REAP Financial Group LLC purchased a new position in MP Materials during the 4th quarter worth approximately $26,000. Financial Consulate Inc. increased its position in MP Materials by 555.3% during the fourth quarter. Financial Consulate Inc. now owns 557 shares of the company's stock worth $28,000 after buying an additional 472 shares during the period. Finally, Los Angeles Capital Management LLC acquired a new position in MP Materials during the fourth quarter worth approximately $28,000. Institutional investors and hedge funds own 52.55% of the company's stock.

About MP Materials

MP Materials Corporation operates as a vertically integrated producer of rare earth materials in North America. The company owns and manages the Mountain Pass Rare Earth Mine and Processing Facility in California, the only commercially viable rare earth mining and processing site in the United States. MP Materials extracts, separates and refines critical rare earth elements—such as neodymium, praseodymium, and cerium—which are essential inputs for permanent magnets used in electric vehicles, wind turbines, and various defense applications.

The Mountain Pass mine first began commercial rare earth production in the 1950s and was later operated by Molycorp until its bankruptcy in 2015.

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