MP Materials (NYSE:MP) Shares Down 3.9% - Time to Sell?

Key Points

• MP Materials shares fell 3.9% to about $60.82 on Friday with volume down 26%, trading near its 200-day moving average; analysts hold an overall Buy consensus with a $79.08 average target, though views are mixed (Morgan Stanley cut its target to $62 while Wedbush sits at $90).
• The company reported quarterly EPS of $0.09 (beat $0.02) but revenue plunged 13.6% YoY to $52.7M, missing estimates and leaving MP with a negative net margin (-38.3%) and negative return on equity.
• Insider selling has been significant: the CFO sold 46,000 shares and the CEO sold 259,179 shares (transactions disclosed under a Rule 10b5-1 plan), with insiders selling 346,000 shares worth about $22.0M over the last 90 days while retaining ~9.5% ownership.

MP Materials Corp. (NYSE:MP - Get Free Report)'s stock price was down 3.9% on Friday . The stock traded as low as $60.58 and last traded at $60.8210. Approximately 5,256,341 shares traded hands during mid-day trading, a decline of 26% from the average daily volume of 7,094,653 shares. The stock had previously closed at $63.32.

Wall Street Analyst Weigh In

Several equities analysts have weighed in on MP shares. TD Securities upgraded shares of MP Materials to a "strong-buy" rating in a report on Monday, February 9th. Morgan Stanley decreased their target price on shares of MP Materials from $71.00 to $62.00 and set an "overweight" rating on the stock in a report on Thursday, April 9th. Wedbush started coverage on shares of MP Materials in a report on Monday. They issued an "outperform" rating and a $90.00 target price on the stock. DA Davidson reiterated a "buy" rating and issued a $82.00 target price on shares of MP Materials in a report on Wednesday, March 11th. Finally, William Blair reiterated an "outperform" rating on shares of MP Materials in a report on Wednesday, March 4th. Two equities research analysts have rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and one has assigned a Sell rating to the company. According to MarketBeat, MP Materials currently has an average rating of "Buy" and a consensus target price of $79.08.

MP Materials Stock Performance

The firm's 50 day moving average is $57.06 and its two-hundred day moving average is $60.86. The stock has a market capitalization of $10.81 billion, a PE ratio of -116.96 and a beta of 1.67. The company has a debt-to-equity ratio of 0.47, a quick ratio of 6.67 and a current ratio of 7.24.

MP Materials (NYSE:MP - Get Free Report) last announced its earnings results on Thursday, February 26th. The company reported $0.09 earnings per share for the quarter, topping the consensus estimate of $0.02 by $0.07. MP Materials had a negative net margin of 38.26% and a negative return on equity of 4.28%. The firm had revenue of $52.69 million for the quarter, compared to the consensus estimate of $76.06 million. During the same period in the prior year, the firm earned ($0.12) EPS. The firm's revenue for the quarter was down 13.6% on a year-over-year basis. As a group, research analysts predict that MP Materials Corp. will post 0.1 earnings per share for the current year.

Insider Activity at MP Materials

In related news, CFO Ryan Corbett sold 46,000 shares of the company's stock in a transaction that occurred on Tuesday, March 17th. The shares were sold at an average price of $60.00, for a total transaction of $2,760,000.00. Following the sale, the chief financial officer directly owned 129,017 shares of the company's stock, valued at $7,741,020. This represents a 26.28% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO James H. Litinsky sold 259,179 shares of the company's stock in a transaction that occurred on Monday, April 20th. The stock was sold at an average price of $64.03, for a total transaction of $16,595,231.37. Following the sale, the chief executive officer directly owned 12,505,965 shares in the company, valued at approximately $800,756,938.95. The trade was a 2.03% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 346,000 shares of company stock worth $21,969,816. 9.50% of the stock is owned by insiders.

Institutional Investors Weigh In On MP Materials

Large investors have recently modified their holdings of the company. Calamos Advisors LLC purchased a new stake in shares of MP Materials in the 3rd quarter valued at approximately $16,726,000. Campbell & CO Investment Adviser LLC purchased a new stake in shares of MP Materials in the 3rd quarter valued at approximately $670,000. Private Advisory Group LLC purchased a new stake in shares of MP Materials in the 4th quarter valued at approximately $9,702,000. Concurrent Investment Advisors LLC purchased a new stake in shares of MP Materials in the 3rd quarter valued at approximately $550,000. Finally, Pier 88 Investment Partners LLC purchased a new stake in shares of MP Materials in the 3rd quarter valued at approximately $1,089,000. 52.55% of the stock is owned by hedge funds and other institutional investors.

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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