Lynas (ASX:LYC) Posts 13x Profit Jump But Stock Fades. Is This a Buying Opportunity?

Lynas profits surge, but doubts remain

Lynas Rare Earths (ASX: LYC) jumped as much as 5% on Thursday after reporting a thirteen-fold profit increase, only to fade and close up just 1.2% at A$17.24. The company posted A$80.2 million in net profit for the six months to December 2025, up from A$5.9 million a year earlier. Revenue climbed 62% to A$413.7 million as NdPr prices, the key rare earth used in electric vehicle motors and wind turbines, roughly doubled over the period.

Here is what caught our attention. NdPr is now above US$111 per kilogram, well above the US$74 average during the half, meaning the current period is tracking much stronger. The gap between improving fundamentals and the market’s lukewarm reaction suggests patient investors may be getting an opportunity.

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Lynas Delivers on Growth as Heavy Rare Earth Revenue Kicks In

This was not just a good result. Lynas remains the only producer of separated light and heavy rare earths outside China, and that position is becoming more valuable by the month as Western governments race to secure their own supply chains.

The company hit several milestones at once. It delivered its first full half-year of heavy rare earth production in Malaysia, opening up premium-priced revenue from dysprosium and terbium. It commissioned the Mt Weld mine expansion, lifting future capacity. And it ended the period with A$1.03 billion in cash after an A$930 million-plus equity raising, giving it serious firepower to fund growth without debt.

What makes this significant is that Lynas is not just talking about growth. It is delivering it while the rare earths market tilts heavily in its favour.

What Spooked the Market, and Is It Justified?

The profit missed analyst expectations of A$91.8 million by about 13%, and that gap weighed on sentiment. Power failures at the Kalgoorlie processing plant in November disrupted production and pushed up costs. On top of that, Lynas did not pay a dividend, and CEO Amanda Lacaze confirmed she will retire at the end of June after 12 years leading the company.

We believe the miss was operational, not structural. Lynas confirmed Kalgoorlie’s power supply stabilised from December, and the company is working on off-grid backup solutions. One rough month at one facility should not overshadow a structural shift in the global rare earths market. The CEO transition is the bigger unknown, though Lacaze has built a strong team and will stay through June to support the handover.

The Investor’s Takeaway for Lynas

We think this looks like an attractive entry point, with one caveat. For investors who believe the Western rare earths supply chain story has years to run, and we do, Lynas offers scale, strategic positioning, and financial strength that no other non-Chinese producer can match.

For those who prefer to wait for confirmation, the key catalyst to watch is the Q3 production report expected in late April. A clean quarter at Kalgoorlie would go a long way toward removing the operational cloud hanging over the stock.