Should You Buy MP Materials Stock While It's Below $50?

MP Materials (NYSE: MP) is a mining company with ambitions to become America's rare earth champion. For almost a decade, it has taken a formerly idle mine at Mountain Pass, California, and turned it into the only large-scale rare earth mining site in the United States.

The final product of this mine, forged from the refined rare earth elements extracted from it, is a tiny but critical magnet that keeps our modern world humming. Call them what you want -- the technical term is neodymium-iron-boron (NdFeB) magnets -- but they are found in everything from smartphones to electric vehicle (EV) motors to MRI machines.

The sheer ubiquity of these magnets, coupled with the uncommon mine-to-magnet operation that defines MP's business, has made this rare-earth miner's stock an interesting play on the supply chain of homegrown metals. The mining stock, however, trades at nearly 1,430 times forward earnings and 37 times sales. It's not cheap, even after its share price nosedived about 50% from all-time highs last October.

So, is MP a buy while it's trading below $50? Let's take a look at the full picture and see.

A strategic player in a fragile supply chain

To understand MP Materials' market opportunity, we have to first zoom out and consider the context. In a nutshell, that context looks like this:

• China dominates the rare-earth metal market, accounting for roughly 69% of rare-earth mining production in 2025.
• China has weaponized this dominance by controlling exports to the U.S., which creates security risks. It can also choose to flood or starve the market of rare earths, which creates problems for U.S. rare earth miners.
• In an attempt to shore up its supply chain, the U.S. government has entered a strategic $400 million partnership with MP Materials.

That last one is crucial. The partnership took effect last July and included not only a $400 million investment, but also a guaranteed price floor of $110 per kilogram of MP Materials' core product, neodymium-praseodymium (NdPr).

Image source: MP Materials.

The package with the federal government, along with a landmark deal with Apple, has given MP enough capital to fund the construction of its second magnet factory ("10X"), which it expects to open in 2028. The factory should increase MP's magnet output to 10,000 metric tons per year -- roughly equivalent to the number of magnets consumed by the U.S. in 2024.

In 2028, the U.S. is expected to consume more than 20,000 metric tons of magnets -- more than half of MP's expected production. By 2035, that number will likely grow past 50,000, according to research by Adamas Intelligence. If MP's magnet production can keep up with these demands, it could potentially grow into the high valuation that the market is currently foisting on it.

At today's price, MP carries a roughly $9 billion market valuation on about $225 million in 12-month revenue. Even if MP has long-term potential, that premium valuation leaves little room for mishaps or errors.

So is MP Materials a buy at $50 a share? The long and the short of it: This stock has plenty of room for growth over the next decade or more. I would temper expectations -- it's a miner, not a millionaire-maker -- but a small holding over a long period could be rewarding for patient investors.

Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and is short shares of Apple. The Motley Fool recommends MP Materials. The Motley Fool has a disclosure policy.