**MP Materials: Good For America, Bad For Your Portfolio**
*By Black Flag Research*
MP Materials stands as the only scaled U.S. rare earths producer, now backed by a landmark Pentagon equity deal aimed at vertical integration. This Department of Defense (DoD) partnership secures MP with guaranteed pricing, long-term offtake agreements, and financing for a massive magnet facility, effectively de-risking the company’s business model.
Despite its strategic importance and strong government backing, MP trades at a high valuation—approximately 16x EV/EBITDA based on 2029 targets—leaving little room for long-term upside. Execution risks and potential shifts in market sentiment present significant downside risks, making MP a less attractive investment compared to others in the sector.
It’s hard at this point to have not heard of MP Materials (MP), especially following its landmark equity deal with the Pentagon, which resulted in the U.S. government taking an equity stake in the company.
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**About the Author**
This article was written by a contributor with over 22 followers on Seeking Alpha. The author’s professional background is in science, coupled with a long-standing interest in investing since childhood. Their investment style focuses predominantly on long-term compounding, aiming to slightly outperform the market on a money-weighted basis over time.
The author concentrates on a circle of relative competence and primarily invests through broad market ETFs. However, they allocate a portion of their portfolio to specific companies expected to outperform over a relatively short timeframe (1–5 years). They take high-reward bets, confident in their long time horizon to recover from any losses, with the potential for significant compounding from early big wins.
Currently, the author works professionally in the mining industry and holds a core belief that we are in the early upward stages of a mining supercycle, particularly in base metals, which is the focus of their investment strategy.
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**Analyst’s Disclosure**
I/we have no stock, option, or similar derivative position in any of the companies mentioned, nor do I/we have any plans to initiate such positions within the next 72 hours. I wrote this article myself, expressing my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article.
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**Seeking Alpha’s Disclosure**
Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed may not reflect those of Seeking Alpha as a whole.
Seeking Alpha is not a licensed securities dealer, broker, U.S. investment adviser, or investment bank. Our analysts are third-party authors who include both professional and individual investors who may not be licensed or certified by any institute or regulatory body.
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