Should You Buy MP Materials Stock at $38?
America's rare-earth materials champion is at a 52-week low. Could this mine-to-magnet company be on the brink of a comeback?
MP Materials (MP) has experienced a significant decline in stock price, currently trading around $38, down more than 60% from its year-high of $100. The company's recent high was fueled by the U.S. trade tensions with China, as the Pentagon purchased $400 million worth of MP stock and agreed to purchase magnets from MP's second factory, 10X.
This partnership provided economic security for MP with a guaranteed buyer, though the company sacrifices a portion of potential profits through profit-sharing agreements. Despite these advantages, MP's valuation remains high at about $6 billion for a mining company that is not consistently profitable, with a price-to-earnings ratio of over 16 times its trailing annual revenue.
As such, the author suggests that MP should be considered as a speculative growth investment for those who can afford potential losses.
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- Should You Buy MP Materials Stock at $38? nasdaq.com
