MP Materials (MP) is back in focus after securing a US$400 million investment from the U.S. Department of Defense, which becomes a primary shareholder and supports a long term magnet supply agreement.

The US$400 million Department of Defense backing comes on the heels of a sharp re-rating, with a 27.6% 1 month share price return and a very large 1 year total shareholder return of 222.6%. This is despite 3 month share price performance having been softer.

If this kind of government backed growth story has your attention, it may also be worth scanning aerospace and defense stocks for other companies tied to long term defense and critical materials themes.

With MP Materials now treated more like critical infrastructure rather than a traditional miner, and trading about 14% below analyst targets with an indicated intrinsic discount near 41%, you have to ask whether this is a fresh opportunity or if the market is already pricing in potential future growth.

Most Popular Narrative: 36.8% Overvalued

The most followed narrative on MP Materials pegs fair value at $50.85, which sits well below the last close at $69.58, and builds a detailed case around magnet scale up and sovereign backing.

MP Materials represents the highest conviction idea in the sector for 2026. The market is currently pricing MP as a mining company, ignoring its imminent transformation into a high margin industrial manufacturer. The "10X Facility" partnership with the Department of Defense (DoD) fundamentally de risks the downside while providing explosive upside.

Curious how a company with current revenue in the low hundreds of millions arrives at a fair value above $50 per share? The narrative leans on sharp revenue expansion, a step change in margins as magnet production ramps, and a future earnings multiple usually reserved for established industrial leaders. Want to see exactly how those moving parts fit together in the model and what has to go right for that price to make sense?

Result: Fair Value of $50.85 (OVERVALUED)

However, this hinges on flawless execution, with risks around magnet ramp timelines and any change in Department of Defense support potentially challenging the entire vertical integration story.

Another View: SWS DCF Model Points to Undervaluation

The user narrative sees MP Materials as 36.8% overvalued at $69.58 versus a $50.85 fair value. Our DCF model points in the opposite direction, with MP trading about 40.7% below an estimated fair value of $117.38. That kind of gap raises a simple question: which story do you trust more, the model or the market?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out MP Materials for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 864 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own MP Materials Narrative

If you look at the numbers and reach a different conclusion, or simply prefer to test your own assumptions, you can build a complete MP thesis in minutes, starting with Do it your way.

A great starting point for your MP Materials research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If MP has you thinking bigger about your portfolio, do not stop at one story. Use focused screeners to quickly surface different types of opportunities that match your style.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.