MP Materials (NYSE:MP) Shares Down 4.3% - Should You Sell?

Key Points

• MP Materials shares fell 4.3% to about $57.48 in mid-day trading, with volume modestly above average. The stock has a $10.24 billion market capitalization and trades below the analyst consensus target of $78.21.
• Analyst sentiment remains broadly positive, with an overall “Buy” rating from two Strong Buy, thirteen Buy, and one Sell recommendation. However, several firms recently lowered their price targets, while Wedbush raised its target to $100.
• The company matched quarterly EPS expectations at a loss of $0.01 but exceeded revenue estimates with $108.49 million, up 89% year over year. MP Materials remains unprofitable, while insider activity was mixed: the COO bought shares, but insiders sold about $39 million worth over the past 90 days.

MP Materials Corp. (NYSE:MP - Get Free Report)'s share price dropped 4.3% on Monday . The stock traded as low as $56.12 and last traded at $57.4790. Approximately 7,021,455 shares were traded during mid-day trading, an increase of 5% from the average session volume of 6,679,296 shares. The stock had previously closed at $60.05.

Wall Street Analysts Forecast Growth

A number of equities research analysts recently issued reports on the company. Wedbush increased their price target on MP Materials from $90.00 to $100.00 and gave the stock an "outperform" rating in a research report on Friday, May 8th. Deutsche Bank Aktiengesellschaft dropped their price objective on MP Materials from $70.00 to $61.00 and set a "buy" rating for the company in a report on Thursday, July 9th. JPMorgan Chase & Co. cut their target price on MP Materials from $75.00 to $60.00 and set an "overweight" rating for the company in a research report on Wednesday, July 29th. Needham & Company LLC reduced their target price on MP Materials from $81.00 to $73.00 and set a "buy" rating on the stock in a report on Wednesday, July 22nd. Finally, Wall Street Zen cut MP Materials from a "hold" rating to a "sell" rating in a research report on Saturday, July 25th. Two analysts have rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Buy" and a consensus target price of $78.21.

MP Materials Stock Down 4.3%

The company has a debt-to-equity ratio of 0.48, a quick ratio of 8.56 and a current ratio of 9.51. The stock has a market capitalization of $10.24 billion, a P/E ratio of -169.05 and a beta of 1.88. The stock's fifty day simple moving average is $51.76 and its two-hundred day simple moving average is $56.87.

MP Materials (NYSE:MP - Get Free Report) last issued its quarterly earnings results on Thursday, August 6th. The company reported ($0.01) EPS for the quarter, hitting analysts' consensus estimates of ($0.01). The company had revenue of $108.49 million for the quarter, compared to analyst estimates of $96.89 million. MP Materials had a negative net margin of 19.85% and a negative return on equity of 1.21%. MP Materials's revenue was up 89.0% compared to the same quarter last year. During the same quarter in the previous year, the business earned ($0.13) earnings per share. As a group, research analysts expect that MP Materials Corp. will post -0.07 EPS for the current fiscal year.

Insider Buying and Selling

In related news, COO Michael Stuart Rosenthal bought 10,000 shares of MP Materials stock in a transaction that occurred on Tuesday, June 9th. The shares were acquired at an average cost of $54.30 per share, for a total transaction of $543,000.00. Following the completion of the acquisition, the chief operating officer directly owned 136,622 shares of the company's stock, valued at approximately $7,418,574.60. The trade was a 7.90% increase in their position. The purchase was disclosed in a document filed with the SEC, which is available at the SEC website. Also, CEO James H. Litinsky sold 234,651 shares of the stock in a transaction that occurred 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 of the company's stock, valued at $780,952,414.55. This represents a 1.94% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 585,167 shares of company stock worth $39,028,272. 8.20% of the stock is owned by insiders.

Hedge Funds Weigh In On MP Materials

Several hedge funds and other institutional investors have recently bought and sold shares of the company. California State Teachers Retirement System lifted its stake in MP Materials by 5,523.6% in the second quarter. California State Teachers Retirement System now owns 9,225,687 shares of the company's stock valued at $516,731,000 after buying an additional 9,061,633 shares during the period. Norges Bank acquired a new stake in shares of MP Materials during the 4th quarter worth approximately $82,531,000. BNP Paribas Financial Markets increased its stake in shares of MP Materials by 76.3% in the 2nd quarter. BNP Paribas Financial Markets now owns 2,921,542 shares of the company's stock valued at $97,200,000 after acquiring an additional 1,264,243 shares in the last quarter. Van ECK Associates Corp increased its stake in shares of MP Materials by 71.6% in the 4th quarter. Van ECK Associates Corp now owns 2,834,914 shares of the company's stock valued at $143,220,000 after acquiring an additional 1,183,307 shares in the last quarter. Finally, Bank of New York Mellon Corp acquired a new position in shares of MP Materials during the 2nd quarter valued at $65,230,000. Institutional investors and hedge funds own 52.55% of the company's stock.

MP Materials Company Profile

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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