MP Materials, trading around $38, is more than 60% below its roughly $100 high last year, after a $400 million Pentagon stock purchase last July lifted shares almost 50%. The Pentagon also agreed to buy magnets from MP's 10X factory, guaranteeing at least $140 million in EBITDA at full output of about 7,000 metric tons a year, but MP must share the first $30 million above that floor and 50% of profits above $170 million EBITDA. For example, at $250 million EBITDA, MP would keep $180 million and the government $70 million. The article notes MP's roughly $6 billion valuation is over 16 times trailing annual revenue of $416 million, above Lynas Rare Earth (about 11.5) and Freeport-McMoRan (about 3.75). The author sees MP as a speculative growth stock suitable only as a small position for investors who can afford to lose money.
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