MP Materials MP and Lynas Rare Earths Limited LYSDY are among the most prominent players in the global rare earth supply chain and are expected to play key roles in the West’s efforts to secure critical mineral independence and reduce reliance on Chinese supply.
Las Vegas, NV-based MP Materials is the only fully integrated rare earth producer in the United States. It has capabilities covering the entire supply chain, from mining and processing to advanced metallization and magnet manufacturing. MP has a market capitalization of $8 billion. Perth, Australia-based Lynas, valued at around $11.2 billion, engages in the exploration, development, mining, extraction and processing of rare earth minerals in Australia and Malaysia.
Rare earths are crucial to the production of high-performance magnets used in EVs, defense and high-tech applications. For investors looking to tap into the long-term growth of the rare earth sector, the key question is which stock one should bet on — MP or LYSDY. To make an informed decision, let us analyze their fundamentals, growth potential and key challenges.
The Case for MP Materials
MP Materials owns and operates the Mountain Pass mine in California, the only large-scale rare earth mining and processing facility in North America. It also owns the Independence facility in Fort Worth, TX, where it manufactures magnetic precursor products and began producing neodymium-iron-boron (NdFeB) permanent magnets in December 2025.
The company made significant strategic progress in 2025, including a long-term agreement to supply U.S.-made recycled rare-earth magnets to Apple and a public-private partnership with the U.S. Department of War (DoW) aimed at accelerating a domestic magnet supply chain.
Backed by government incentives, the company is constructing the second domestic magnet manufacturing facility (the 10X Facility) in Northlake, TX, which will lift its total U.S. magnet capacity to 10,000 metric tons. MP is also expanding operations at the Independence facility and scaled heavy rare earth separation commissioning activities are set to begin soon at Mountain Pass.
Operationally, MP continues to scale production and downstream manufacturing capabilities. In first-quarter 2026, the company produced a record 917 metric tons of neodymium-praseodymium (NdPr), up 63% year over year, driven by higher separated-product output. Rare-earth oxide concentrate production also reached a quarterly record of 12,983 metric tons, up 6% year over year due to improved recoveries and operational efficiencies.
Total company revenues rose 49% year over year to $90.6 million in the quarter, supported by stronger performance in both the Materials and Magnetics segments. MP also recognized $42.3 million in income related to its price protection agreement with the DoW.
However, profitability remains under pressure as the company transitions toward higher-value separated rare-earth products and magnetic materials. Cost of sales increased 52% in the quarter, while SG&A expenses rose 39%. Start-up costs surged more than 500% due to magnet production and chlor-alkali facility ramp-ups, while advanced project and development expenses climbed 302%.
MP Materials reported an operating loss of $24 million in the first quarter of 2026 compared with the year-ago loss of $34.8 million. The company reported adjusted earnings of three cents per share against the year-ago quarter’s loss of 12 cents. Looking ahead, the company expects additional cost pressures as production scales. Start-up costs are also likely to increase further in the coming quarters.
The Case for Lynas
The company’s operations are anchored by the high-grade Mt Weld mine in Western Australia. Material from Mt Weld is processed at facilities in Kalgoorlie and the Lynas Malaysia advanced materials plant in Kuantan. Lynas is also developing a Heavy Rare Earth (HRE) processing facility in Texas under a U.S. DoW contract.
Lynas achieved a milestone in 2025 with the production of dysprosium oxide (Dy) and terbium oxide (Tb) on the new production line at Lynas Malaysia. It marked the first commercial production of separated HRE for Lynas and also the first production outside China in decades.
Lynas reported NdPr production of 1,996 tons in the third quarter of fiscal 2026 (ended March 31, 2026), representing a 32% year-over-year increase. The company also produced eight tons of dysprosium and terbium during the quarter. In March 2026, the company produced samarium oxide, a month ahead of target. This first production of samarium oxide sets Lynas apart as a commercial producer and supplier of both light and heavy rare earths.
Samarium oxide is in high demand for use in high-performance magnets for electronics and aerospace, as well as optical, catalyst and medical applications. Lynas expects to deliver annual initial production of around 400 tons with more upside, once its additional HRE separation capacity is constructed and operational.
Revenues surged 115% to AUD 265 million ($186 million) for the third quarter of fiscal 2026, driven by higher NdPr and REO volumes and stronger NdPr pricing.
Strategically, Lynas continues to secure long-term demand visibility. In March 2026, the company announced the signing of a binding Letter of Intent to finalize a rare earth oxide supply agreement with the U.S. government. This will support the U.S. industrial base and the U.S. government’s rare earths supply-chain resilience efforts. Per the terms, around $96 million previously allocated to the construction of an HRE facility in Texas will now be used to purchase light and heavy rare earth oxide products from Lynas’ existing facilities over a four-year period. The floor price for the supply of NdPr oxide will be $110 per kg.
The company also signed two important agreements with its Japanese partners, Japan Australia Rare Earths B.V. (“JARE”), which provide firm offtake commitments, pricing floors and exposure to upside pricing. The renewal of Lynas Malaysia’s operating license for 10 years in March 2026 significantly enhances regulatory certainty compared with prior shorter-term renewals.
Having largely completed its Lynas 2025 growth plan, which expanded capacity, improved efficiency and enabled HRE production, the company is now focused on its “Towards 2030” strategy. Its two focal points are optimizing performance from the Lynas 2025 capital investments and expanding its resource and scale, boosting downstream capacity and expanding in the metal and magnet supply chain. Lynas continues to develop partnerships with metal and magnet makers to expand the metal and magnet supply chain.
How do Estimates Compare for MP & LYSDY?
The Zacks Consensus Estimate for MP Materials’ fiscal 2026 earnings is pegged at 22 cents per share, indicating a turnaround performance from the loss of 24 cents in 2025. The estimate for MP Materials’ 2027 earnings is pegged at $1.04 per share, implying 373.4% year-over-year growth.
The Zacks Consensus Estimate for Lynas’ fiscal 2026 earnings (ending June 2026) is pegged at 21 cents per share, indicating a substantial increase from earnings of one cent in fiscal 2025. The fiscal 2027 estimate of 48 cents indicates 129% year-over-year growth.
Image Source: Zacks Investment Research
Both estimates for MP Materials’ 2026 and 2027 have been revised downward over the past 90 days. Estimates for Lynas’ fiscal 2026 have moved down in the past 90 days, while the estimates for fiscal 2027 have moved up. This is shown in the charts below.
Image Source: Zacks Investment Research
MP vs. LYSDY: Price Performance & Valuation
Over the past three months, MP Materials stock has declined 31.2% compared with Lynas’ 19.8% fall.
Image Source: Zacks Investment Research
MP Materials is currently trading at a forward 12-month price-to-sales ratio of 12.54 while Lynas is trading at a lower 9.53.
Image Source: Zacks Investment Research
MP Materials or Lynas: Which Stock is the Better Buy?
Both MP Materials and Lynas are strategically positioned to benefit from the robust long-term demand outlook for rare earths. MP continues to enhance its competitive position through government-backed initiatives, expanding magnet manufacturing capacity and greater downstream integration, all of which strengthen its long-term growth prospects. However, its ongoing investments and capacity expansion continue to weigh on costs and near-term profitability.
Lynas has executed well operationally, successfully commercializing heavy rare earth production and securing long-term supply agreements with favorable pricing mechanisms. Nevertheless, despite its operational progress, its projected earnings growth lags MP Materials, whose longer-term growth potential remains stronger despite near-term cost pressures.
MP Materials currently carries a Zacks Rank #3 (Hold), while Lynas has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MP Materials Corp. (MP): Free Stock Analysis Report
Lynas Rare Earths Limited - Sponsored ADR (LYSDY): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).