What happened

Nearly a week since it reported estimate-crushing earnings for the fiscal third quarter of 2021, shares of rare earth metals miner MP Materials (MP -0.33%) are marching higher on Thursday, rising 9.1 % through 3:10 p.m. EDT.

You can thank Jefferies & Co. for that.

The chemical element neodymium with its symbol, atomic weight, and atomic number in white lettering on the periodic table.

Image source: Getty Images.

So what

MP Materials may not be the lowest-cost miner of rare earth metals, admitted Jefferies this morning in a note covered by StreetInsider.com. But its cost is low enough to be profitable, generating "solid" free cash flow and having more than $400 million of "net cash on hand."

This, argues the analyst, positions MP Materials "to evolve from a provider of rare earth concentrate, and soon refined NdPr, into a fully integrated magnet producer, and eventual recycler" of rare earths. The company is also well positioned to profit from global electrification trends and "US ambitions [to establish] a domestic rare earth industry" as an alternative to buying rare earths from China.

Indeed, you may have noticed that earlier today, a positive prognosis for demand for metals (of all sorts) from analysts at S&P Global Market Intelligence sent shares of metals miners, such as Alcoa and Companhia Siderúrgica Nacional, flying higher on the theory that "the accelerating energy transition" will be good news for metals stocks.

Now what

In the analyst's opinion, all of this justifies a $55 price target and a "buy" rating for the stock. But while I agree with the analyst's overall bullish thesis for MP Materials' business, I do have concerns about Jefferies' full-throated endorsement of MP's stock price.

Consider: At Wall Street's now-projected $0.63 per share in profit for this year, MP Materials stock already costs a staggering 67 times earnings. Granted, analysts do believe that MP's earnings will grow over time -- perhaps as high as $1.98 per share in fiscal 2025. If they're right about that, such earnings would suffice to bring MP stock down to a much more palatable 21 times earnings valuation -- but not for another four years.

That's a long time to wait for MP to grow into its valuation, if you ask me. Moreover, the stock would have to stay flat for four straight years to get to that valuation.

My hunch: Flat share prices are not what investors are looking for when looking for a growth stock.