Analysts Have Lowered Expectations For MP Materials Corp. (NYSE:MP) After Its Latest Results

It's been a pretty great week for MP Materials Corp. (NYSE:MP) shareholders, with its shares surging 12% to US$20.41 in the week since its latest third-quarter results. Revenues of US$63m beat estimates by a substantial 57% margin. MP Materials also reported a statutory loss of US$0.16 per share, which was roughly in line with what the analysts predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for MP Materials

Taking into account the latest results, the consensus forecast from MP Materials' twelve analysts is for revenues of US$340.0m in 2025. This reflects a huge 85% improvement in revenue compared to the last 12 months. Statutory losses are forecast to balloon 82% to US$0.067 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$371.8m and earnings per share (EPS) of US$0.095 in 2025. The analysts have made an abrupt about-face on MP Materials, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.

There was no major change to the consensus price target of US$21.76, signalling that the business is performing roughly in line with expectations, despite lower earnings per share forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic MP Materials analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$16.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the MP Materials' past performance and to peers in the same industry. It's clear from the latest estimates that MP Materials' rate of growth is expected to accelerate meaningfully, with the forecast 63% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 16% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.5% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that MP Materials is expected to grow much faster than its industry.

The Bottom Line

The biggest low-light for us was that the forecasts for MP Materials dropped from profits to a loss next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple MP Materials analysts - going out to 2026, and you can see them free on our platform here.

You can also see whether MP Materials is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.