MP Materials (NYSE:MP) Trading Down 9% - Here's Why

Key Points

• MP Materials fell 9% on Monday to about $63.35 with trading volume of 18.24 million shares, roughly 72% above its average session volume.
• Insider selling has been substantial: CEO James Litinsky sold 385,000 shares (~$24.23M) and CFO Ryan Corbett sold 38,146 shares, with insiders disposing of ~991,557 shares (~$62.8M) over the last three months while owning 12.6% of stock.
• Analyst coverage is mixed but the consensus is a "Moderate Buy" with a $78.91 price target; however, the company reported a negative net margin (‑50.55%) and revenue declined ~14.9% year‑over‑year.

MP Materials Corp. (NYSE:MP - Get Free Report) fell 9% on Monday . The stock traded as low as $62.62 and last traded at $63.35. 18,242,302 shares were traded during mid-day trading, an increase of 72% from the average session volume of 10,586,724 shares. The stock had previously closed at $69.58.

Analysts Set New Price Targets

MP has been the subject of several recent research reports. Wall Street Zen cut MP Materials from a "hold" rating to a "sell" rating in a report on Saturday, November 15th. BMO Capital Markets upgraded MP Materials from a "market perform" rating to an "outperform" rating and lowered their price objective for the company from $76.00 to $75.00 in a research report on Monday, November 24th. Bank of America upped their target price on MP Materials from $78.00 to $112.00 and gave the company a "buy" rating in a research note on Wednesday, October 15th. Morgan Stanley upgraded shares of MP Materials from an "equal weight" rating to an "overweight" rating and lifted their price target for the stock from $68.50 to $71.00 in a research note on Friday, December 5th. Finally, William Blair assumed coverage on shares of MP Materials in a research note on Tuesday, January 13th. They issued an "outperform" rating for the company. One equities research analyst has rated the stock with a Strong Buy rating, thirteen have assigned a Buy rating and one has issued a Sell rating to the company. According to MarketBeat.com, MP Materials has a consensus rating of "Moderate Buy" and a consensus price target of $78.91.

MP Materials Price Performance

The company has a debt-to-equity ratio of 0.47, a quick ratio of 7.51 and a current ratio of 8.05. The stock has a fifty day simple moving average of $59.21 and a 200-day simple moving average of $64.55.

MP Materials (NYSE:MP - Get Free Report) last announced its earnings results on Thursday, November 6th. The company reported ($0.10) earnings per share (EPS) for the quarter, topping analysts' consensus estimates of ($0.15) by $0.05. The business had revenue of $53.55 million during the quarter, compared to analysts' expectations of $49.72 million. MP Materials had a negative net margin of 50.55% and a negative return on equity of 7.69%. The firm's revenue for the quarter was down 14.9% on a year-over-year basis. During the same quarter last year, the company posted ($0.12) EPS. As a group, sell-side analysts predict that MP Materials Corp. will post -0.19 earnings per share for the current year.

Insider Activity at MP Materials

In related news, CFO Ryan Corbett sold 38,146 shares of the stock in a transaction that occurred on Tuesday, December 9th. The stock was sold at an average price of $60.00, for a total transaction of $2,288,760.00. Following the sale, the chief financial officer directly owned 156,666 shares in the company, valued at $9,399,960. This represents a 19.58% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO James H. Litinsky sold 385,000 shares of the firm's stock in a transaction on Friday, December 5th. The shares were sold at an average price of $62.94, for a total value of $24,231,900.00. Following the sale, the chief executive officer directly owned 13,105,965 shares of the company's stock, valued at $824,889,437.10. This represents a 2.85% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 991,557 shares of company stock worth $62,785,202 over the last three months. 12.60% of the stock is owned by company insiders.

Institutional Investors Weigh In On MP Materials

Several hedge funds and other institutional investors have recently made changes to their positions in MP. Calamos Advisors LLC bought a new stake in shares of MP Materials during the third quarter worth approximately $16,726,000. Rockefeller Capital Management L.P. grew its holdings in MP Materials by 132.7% during the 2nd quarter. Rockefeller Capital Management L.P. now owns 176,984 shares of the company's stock worth $5,888,000 after acquiring an additional 100,915 shares during the period. Ballentine Partners LLC acquired a new stake in MP Materials during the 2nd quarter worth $241,000. Campbell & CO Investment Adviser LLC bought a new stake in shares of MP Materials during the 3rd quarter valued at $670,000. Finally, Concurrent Investment Advisors LLC acquired a new position in shares of MP Materials in the 3rd quarter valued at $550,000. 52.55% of the stock is owned by institutional investors and hedge funds.

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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