While shareholders of MP Materials (NYSE:MP) are in the black over 1 year, those who bought a week ago aren't so fortunate
Unless you borrow money to invest, the potential losses are limited. But if you pick the right stock, you can make a lot more than 100%. For example, the MP Materials Corp. (NYSE:MP) share price had more than doubled in just one year - up 155%. Also pleasing for shareholders was the 38% gain in the last three months. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. We'll need to follow MP Materials for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
See our latest analysis for MP Materials
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the last year MP Materials grew its earnings per share, moving from a loss to a profit.
While it's good to see positive EPS of US$0.62 this year, the loss wasn't too bad last year. But judging by the share price, the market is very pleased with the milestone of reaching profitability. Inflection points like this can be a great time to take a closer look at a company.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on MP Materials' earnings, revenue and cash flow.
A Different Perspective
MP Materials boasts a total shareholder return of 155% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 38% in that time. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for MP Materials (of which 2 are a bit concerning!) you should know about.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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.
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