Why Is MP Materials Stock Gaining Friday?

MP Materials Corp. (NYSE:MP) stock rose nearly 3% Friday, extending gains after company executives and a director purchased about $3.35 million in stock earlier this week.

The rare-earth producer outperformed the broader market as the Nasdaq fell 1.99% and the S&P 500 declined 0.85%. The Materials sector also slipped about 0.2%.

The gains followed strong quarterly earnings and progress in the company’s rare-earth magnet business.

Insider Buying Draws Investor Attention

Three MP Materials insiders purchased a combined 92,476 shares on Nov. 10 and Nov. 11.

Chief Financial Officer Ryan Corbett bought 5,476 shares worth about $198,500.

Director Randall Weisenburger purchased 55,000 shares for approximately $1.98 million. Chief Operating Officer Michael Rosenthal acquired 32,000 shares worth about $1.18 million.

The purchases may signal management’s confidence in the company’s outlook.

Strong Earnings Support Outlook

MP Materials recently reported third-quarter revenue of $147.66 million, up 176% year over year. Revenue exceeded Wall Street’s $117.47 million estimate.

The company earned 4 cents per share, beating expectations for a 2-cent loss.

CEO James Litinsky said MP Materials completed General Motors’ qualification process. The milestone clears the way for commercial magnet shipments and related revenue beginning in the fourth quarter.

The company ended the quarter with approximately $1.34 billion in cash and short-term holdings.

Analysts Outlook and Technical Analysis

MP Materials carries a consensus Buy rating and an average analyst price forecast of $65.33.

On Nov. 9, Canaccord Genuity maintained its Buy rating but lowered its price forecast to $70. Barclays maintained its Overweight rating while reducing its forecast to $54. Morgan Stanley maintained its Overweight rating and lowered its price forecast to $66 on Oct. 7.

Despite Friday’s gains, technical indicators remain weak.

The stock trades above its 20-day simple moving average of $38.16 but below its 50-day average of $43.93 and 200-day average of $53.72.

Its relative strength index of 46.16 suggests neutral momentum. Meanwhile, Benzinga Edge assigns the stock a momentum score of just 5.76.

Traders are watching resistance near $42.50 and support around $37.50.

MP Stock Price Action

MP Stock Price Activity: MP Materials shares were up 2.88% at $38.53 at the time of publication on Friday, according to Benzinga Pro data.

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