Charting the Rare-Earth Race: MP Materials and Lynas Positioned for 2026 Growth

Rare-earth stocks are capturing renewed investor attention as geopolitical tensions reshape the global supply chain landscape. With China controlling approximately 70% of rare-earth mining and 90% of processing capacity, Western nations are making strategic investments to reduce dependence on Chinese supply. Two companies stand at the forefront of this shift: MP Materials and Lynas Rare Earths Limited, both critical players in powering electric vehicles, defense systems, and advanced technologies.

These companies represent distinct approaches to rare-earth production and supply chain integration. MP Materials, headquartered in Las Vegas, operates as the United States’ only fully integrated rare-earth producer, covering mining, processing, and magnet manufacturing. Lynas Rare Earths, based in Perth, Australia, has built a reputation for environmentally conscious operations with mines in Australia and processing facilities spanning multiple continents. With market capitalizations around $11.8 billion (MP) and $11.5 billion (Lynas), both firms are positioned to benefit from the West’s drive toward mineral independence. The key question for investors is which company offers superior growth potential and better value for long-term portfolio positioning.

MP Materials’ Manufacturing Expansion and Strategic Partnerships

MP Materials has solidified its competitive position through landmark collaborations that underscore its strategic importance. In July 2025, the company announced a major supply agreement with Apple to provide rare-earth magnets manufactured entirely from recycled materials within the United States—a significant step toward domestic supply chain security. The same month, MP entered into a partnership with the U.S. Department of Defense to construct the 10X Facility, a second domestic magnet manufacturing plant that will elevate total U.S. rare-earth magnet production capacity to 10,000 metric tons annually. This DoD collaboration, backed by government investments and a Price Protection Agreement effective October 2025, provides crucial revenue stability and margin support.

Production momentum tells a compelling story. In the third quarter of 2025, MP delivered record output of 721 metric tons of NdPr (Neodymium-Praseodymium), surging 51% year-over-year as the company scaled production of separated products. Rare-earth oxide production reached 13,254 metric tons, down 4% but still representing the company’s second-strongest quarterly performance. The Materials segment saw a 61% increase in NdPr oxide and metal revenues driven by higher sales volumes and pricing power, though this was partially offset by the absence of rare-earth concentrates in the quarter.

Financial performance reflects the transition phase typical of expanding operations. Q3 2025 revenues totaled $56.6 million, a 15% decline year-over-year, while the company reported a narrower loss of 10 cents per share versus 12 cents in the prior-year period. This improvement demonstrates tightening losses even as the company invests heavily in advanced projects and production ramp-up. Management guidance indicates that 2025 will likely close with a full-year loss, but profitability is expected to commence in Q4 2025 and strengthen throughout 2026 as production scaling and government support agreements take effect.

Lynas’ Capacity Optimization and Integrated Supply Chain

Lynas has pursued a different strategic pathway, emphasizing environmental stewardship and operational integration across its global footprint. The company’s high-grade Mt Weld mine in Western Australia feeds raw concentrates to processing facilities in Kalgoorlie, Australia, and Kuantan, Malaysia. This integrated approach ensures full traceability and supply chain security—assets increasingly valued by Western manufacturers seeking reliable, non-Chinese sources.

A pivotal milestone arrived in 2025 with the successful production of Dysprosium Oxide and Terbium Oxide at the Lynas Malaysia facility—marking the first commercial production of separated Heavy Rare Earths outside China in decades. This breakthrough validates Lynas’ technology platform and opens new revenue opportunities in premium rare-earth products. The completion of the “Lynas 2025” growth initiative, launched in 2019, concluded major capital projects including expanded Mt Weld production and the delivery of 10.5 kilotons per annum of finished NdPr capacity.

With major capital investments now complete, Lynas is transitioning to its “Towards 2030” strategy, which focuses on optimizing returns from existing capacity while pursuing selective expansion in metals and magnets. This shift positions the company to convert completed capital expenditures into profitability and cash generation—a critical transition as the rare-earth sector matures.

Financial Outlooks Tell Divergent Stories

The earnings trajectory reveals contrasting near-term paths. The Zacks Consensus Estimate projects MP Materials will report a loss of 32 cents per share in fiscal 2025, an improvement from the 44-cent loss in 2024, with earnings estimated at 61 cents in fiscal 2026. For Lynas, fiscal 2026 earnings (ending June 2026) are estimated at 19 cents per share, representing substantial improvement from 1 cent in fiscal 2025, with fiscal 2027 projected at 31 cents—a 66% year-over-year increase.

Both sets of estimates have been revised downward over the past 60 days, reflecting market caution around near-term profitability visibility. MP faces near-term margin pressure from production ramp-up costs, while Lynas operates with greater clarity on capacity utilization and cost structures given the completion of major capital projects.

Valuation Metrics and Historical Performance

Over the trailing twelve-month period, MP Materials stock appreciated 220.6%, outpacing Lynas’ 186.9% gain. This outperformance reflects investor enthusiasm for MP’s domestic production capabilities and government support mechanisms, though both stocks have significantly outpaced their industry peers.

Valuation metrics, however, tell a more nuanced story. MP Materials trades at a forward 12-month price-to-sales ratio of 24.56X—a substantial premium to the industry average of 1.35X. Lynas, while trading above industry averages, commands a lower valuation multiple at 13.95X. This valuation gap raises important questions about growth expectations and risk-adjusted returns. MP’s premium valuation reflects optimism regarding domestic production scaling and government backing, while Lynas’ lower multiple may present value for investors seeking exposure without paying for maximum optimism.

Investment Implications: Positioning for 2026 and Beyond

Both companies represent legitimate investment opportunities within the strategically important rare-earth sector. MP Materials showcases impressive production momentum and unprecedented government backing, yet faces continued margin pressure as production ramps and overhead costs rise. The company’s path to sustainable profitability extends into 2026, requiring patience from investors. Lynas, by contrast, approaches a profitability inflection point with greater clarity on cost structures and capacity utilization, having substantially completed capital expenditure programs.

From a risk-adjusted perspective, Lynas presents a more compelling opportunity. The company has demonstrated operational execution, completed major growth projects, and entered a phase of margin expansion driven by capacity optimization rather than continued investment. Its lower valuation multiple offers margin of safety while the “Towards 2030” strategy hints at selective expansion opportunities.

The current market environment rewards domestic production and government partnerships, advantages that favor MP Materials. However, sustainable returns typically flow to companies transitioning from investment phases to profitability phases—the position Lynas now occupies. For investors balancing growth potential against valuation and near-term visibility, Lynas Rare Earths presents the more strategically positioned selection in the rare-earth competitive landscape.