Down 24% since April, have investors fallen out of love with Lynas shares?

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The Lynas Rare Earths Ltd (ASX: LYC) share price has had a rough trot of late. It has tumbled 24% from its April peak of $11.59.

At the time of writing, the Lynas share price is trading at $8.805, 0.8% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is falling 2% right now.

Has the market turned on the Lynas share price following last year’s mammoth 155% surge?

Let’s take a look.

Has the Lynas share price’s moment in the sun ended?

The Lynas share price was one of the 2021 stars of the ASX 200, launching 155% over the course of last year. But the market appears to have turned on the rare earths giant in 2022.

And Fat Prophets founder and CEO Angus Geddes says he knows why.

Geddes told The Bull that the stock’s monumental rise was driven by soaring rare earth prices. But the value of rare earths has begun to ease amid inflationary pressures.

On top of that, he said the company’s sales are slowing down while its costs are rising. Its cash costs reportedly jumped 35% to $341 million last financial year.

As my Fool colleague Tony Yoo reported last week, the company’s latest earnings saw its price-to-earnings (P/E) ratio more than halve.

The company sold 15,263 tons of rare earth oxide in financial year 2022, marking a 7% year-over-year fall. Meanwhile, its cost of sales rose 15% to $348.4 million.

However, Lynas’ average realized price last financial year was $60.3 per kilogram – a 102% improvement – ​​which saw its cash receipts lift 84% to $855 million. The company’s production volume also rose 1% to 15,970 tons.

If prices have eased as Geddes notes, Lynas’ bottom line may receive a noticeable dent with the impact potentially reverberating through to its share price. He has slapped Lynas shares with a sell recommendation.

But not all experts agree with the negative assessment.

Datt Capital chief investment officer Emanuel Datt said Lynas is “the gold standard” when it comes to producers of the minerals, as Yoo reported earlier this week.

The fundie also warned that China could restrict the supply of rare earths, likely causing a global shortage that could see prices soar.

The Lynas share price is down 20% year to date. Although, it has gained 30% since this time last year.

Meanwhile, the ASX 200 has dumped 10% year to date and 9% over the past 12 months.

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