Some Analysts Just Cut Their MP Materials Corp. (NYSE:MP) Estimates

The analysts covering MP Materials Corp. (NYSE:MP) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the latest downgrade, the twelve analysts covering MP Materials provided consensus estimates of US$244m revenue in 2023, which would reflect a sizeable 35% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing US$331m of revenue in 2023. The consensus view seems to have become more pessimistic on MP Materials, noting the sizeable cut to revenue estimates in this update.

View our latest analysis for MP Materials

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 58% by the end of 2023. This indicates a significant reduction from annual growth of 46% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.9% annually for the foreseeable future. It's pretty clear that MP Materials' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for MP Materials this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of MP Materials going forwards.

Unsatisfied? At least one of MP Materials' twelve analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.