USA Rare Earth's Growth Potential Amid Market Volatility
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy USAR?
Source: Fool
- Market Volatility Impact: USA Rare Earth's shares have dropped by 12.95%, currently priced at $18.95 with a market cap of $2.8 billion, indicating that despite potential market sentiment improvements, high volatility is likely to persist, maintaining significant investment risks.
- Infrastructure Development Plans: The company aims to develop the Round Top deposit in Texas, which contains 15 of the 17 rare-earth elements, while also constructing a rare-earth magnets production facility in Oklahoma, with a total estimated investment of $4.1 billion.
- Significant Financing Progress: USA Rare Earth has raised approximately $1.5 billion in equity and received a letter of intent for $1.6 billion in government funding, with around $343 million in cash on hand, needing an additional $650 million for project funding, indicating potential shareholder dilution risks ahead.
- Long-Term Revenue Expectations: The company forecasts annual revenues of $2.6 billion and EBITDA of $1.2 billion by 2030, suggesting a future enterprise value of $12 billion based on current mining company EV/EBITDA ratios of 9-10x, with stock prices potentially doubling in the coming years.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy USAR?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on USAR
Wall Street analysts forecast USAR stock price to rise
5 Analyst Rating
5 Buy
0 Hold
0 Sell
Strong Buy
Current: 19.080
Low
15.00
Averages
22.75
High
28.00
Current: 19.080
Low
15.00
Averages
22.75
High
28.00
About USAR
USA Rare Earth, Inc. is a supplier of sintered neo magnets and other rare earth metals. The Company is engaged in developing a NdFeB magnet manufacturing plant in Stillwater, Oklahoma, and intends to establish domestic rare earth and critical minerals supply, extraction, and processing capabilities to both supply its magnet manufacturing plant and market surplus materials to third parties. It is focused on developing domestic rare earth production that offers sustainable and secure domestic supply of materials critical to key industries. Its vertically integrated approach consists of sourcing rare earth elements (REEs), in addition to other critical minerals such as gallium, to producing finished NdFeB magnets. The Company serve a variety of industries, such as defense, robotics, electric vehicles, wind power, appliances, cordless tools and computing and semiconductors. The Company owns, Less Common Metals Ltd., which is a scaled ex-China rare earth metal and alloy manufacturer.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
USA Rare Earth Aims to Secure U.S. Supply Chain with Domestic Magnet Production
- Supply Chain Vulnerability: The U.S. heavily relies on China for permanent magnet production, creating a significant supply chain weakness that could jeopardize critical sectors like electric vehicles, defense, and clean energy.
- Mining Development Plans: USA Rare Earth aims to commence operations at the Round Top Deposit in Texas by 2028, which contains 15 rare-earth elements and is expected to provide essential materials for the American industrial ecosystem.
- Manufacturing Facility Construction: The company is developing a magnet manufacturing facility in Oklahoma projected to produce 5,000 metric tons of sintered permanent magnets annually by 2026, positioning it as one of the few fully integrated rare-earth companies in the U.S.
- Funding Dependency Risks: Despite its promising outlook, USA Rare Earth is currently 100% reliant on external funding and lacks a history of commercial operations, necessitating careful risk and return assessments by investors.
See More
USA Rare Earth Aims to Localize Magnet Production
- Rare Earth Resource Advantage: USA Rare Earth controls the Round Top Mountain in Texas, which contains 15 rare earth metals and significant lithium deposits; if successfully developed, it could greatly enhance U.S. self-sufficiency in the rare earth supply chain.
- Government Investment Support: The Trump administration announced a $1.6 billion deal in 2026 to acquire a 10% stake in USA Rare Earth, with funds allocated for developing the Round Top mine and a magnet manufacturing facility in Oklahoma, highlighting the government's commitment to domestic production.
- Market Competition Challenges: Despite federal backing, USA Rare Earth faces high costs for mine construction and manufacturing while contending with China's dominance in the global permanent magnet market, which poses significant competitive risks.
- Investment Risk Advisory: While the company has long-term potential, the numerous uncertainties involved suggest that investors should proceed with caution, and conservative investors might be better served by considering rare earth-focused metal exchange-traded funds (ETFs) to mitigate risk.
See More
USA Rare Earth Aims to Revolutionize Magnet Manufacturing
- Rare Earth Resource Advantage: USA Rare Earth controls the Round Top Mountain in Texas, which contains 15 of the 17 rare-earth metals and significant lithium deposits, and if successful, this could greatly enhance U.S. self-sufficiency in the rare-earth supply chain.
- Government Investment Support: In early 2026, the Trump administration announced a $1.6 billion deal to acquire a 10% stake in USA Rare Earth, with funds allocated for developing the Round Top mine and a magnet manufacturing facility in Oklahoma, highlighting government commitment to the project.
- Market Competition Risks: Despite federal backing, USA Rare Earth faces high costs associated with building its mine and manufacturing arm, along with fierce competition from China, which remains the dominant global supplier of permanent magnets, adding uncertainty to the project.
- Cautious Investment Advice: While USA Rare Earth has long-term potential, analysts suggest conservative investors consider metal exchange-traded funds (ETFs) to mitigate risks and achieve more stable returns, given the numerous unknowns surrounding the company’s future cash flow.
See More
USA Rare Earth Emerges as Top Meme Stock
- Significant Stock Returns: USA Rare Earth, Inc. (NASDAQ:USAR) has seen its shares rise over 60% year-to-date, with a notable surge in late January following news of U.S. government backing for a $1.6 billion funding, reflecting strong market confidence in its future prospects.
- Advancement in Financing Plans: On January 26, the company announced it received a letter of intent for a debt-and-equity package aimed at developing a rare-earth mine and magnet manufacturing facility in Texas, which is intended to enhance production of critical materials for defense and tech sectors while reducing reliance on Chinese supplies.
- Analyst Price Target Increases: Roth Capital raised its price target for USA Rare Earth from $25 to $35 on January 27 while maintaining a Buy rating, with analysts noting that the funding would bolster the company's prospects for establishing an end-to-end value chain for rare earth materials domestically.
- EBITDA Potential: Cantor Fitzgerald's analyst raised the price target from $28 to $35 on January 30, highlighting that magnet production could generate $1.2 billion in EBITDA by 2030, contingent on achieving key milestones.
See More
Competition Intensifies in U.S. Rare Earth Supply Chain
- Market Leadership: MP Materials owns the Mountain Pass mine in California, the only active rare-earth metals mine in the U.S., and is set to boost domestic magnet output to 10,000 metric tons through its Fort Worth Independence factory and the upcoming '10X Facility', thereby solidifying its market leadership.
- Financial Backing: In July 2025, MP Materials received a $400 million investment from the Department of Defense, which will fund the construction of its second magnet factory and includes a 100% purchase agreement for future production, significantly enhancing its financial stability and competitive edge.
- Future Potential: USA Rare Earth controls the Round Top deposit, one of the largest heavy rare-earth element deposits in the U.S., and while it is not operational yet, it aims for commercial production by 2028, potentially offering significant upside for investors if successful.
- Policy Impact: The Trump administration announced a $1.6 billion funding package for USA Rare Earth in early 2026 to support its mine development and the construction of its first magnet factory in Oklahoma, which will help reduce U.S. reliance on Chinese rare earths.
See More
Rising Importance of Rare Earth Materials in the U.S.
- Market Dynamics: MP Materials (NYSE: MP) has seen its stock rise by 14.6% in 2026, although it has retreated from a 16.3% increase at the end of January, indicating ongoing volatility in the rare earth sector and investor scrutiny.
- Government Support Agreement: USA Rare Earth secured $3.1 billion in government funding and private investment through an agreement with the U.S. government, which derisks its business plan and positively influences MP Materials' market outlook.
- Price Floor Risks: Unlike MP Materials, USA Rare Earth did not receive any price-floor commitments from the government, raising market concerns and leading to a sell-off in MP Materials' stock as investors reacted to uncertainties about future developments.
- Strategic Partnership Outlook: MP Materials signed a $500 million supply agreement with Apple, underscoring its critical role in the U.S. rare earth supply chain, and is expected to continue receiving government and market support despite facing political risks.
See More
USA Rare Earth Aims to Secure U.S. Supply Chain with Domestic Magnet Production
- Supply Chain Vulnerability: The U.S. heavily relies on China for permanent magnet production, creating a significant supply chain weakness that could jeopardize critical sectors like electric vehicles, defense, and clean energy.
- Mining Development Plans: USA Rare Earth aims to commence operations at the Round Top Deposit in Texas by 2028, which contains 15 rare-earth elements and is expected to provide essential materials for the American industrial ecosystem.
- Manufacturing Facility Construction: The company is developing a magnet manufacturing facility in Oklahoma projected to produce 5,000 metric tons of sintered permanent magnets annually by 2026, positioning it as one of the few fully integrated rare-earth companies in the U.S.
- Funding Dependency Risks: Despite its promising outlook, USA Rare Earth is currently 100% reliant on external funding and lacks a history of commercial operations, necessitating careful risk and return assessments by investors.
See More
USA Rare Earth Aims to Localize Magnet Production
- Rare Earth Resource Advantage: USA Rare Earth controls the Round Top Mountain in Texas, which contains 15 rare earth metals and significant lithium deposits; if successfully developed, it could greatly enhance U.S. self-sufficiency in the rare earth supply chain.
- Government Investment Support: The Trump administration announced a $1.6 billion deal in 2026 to acquire a 10% stake in USA Rare Earth, with funds allocated for developing the Round Top mine and a magnet manufacturing facility in Oklahoma, highlighting the government's commitment to domestic production.
- Market Competition Challenges: Despite federal backing, USA Rare Earth faces high costs for mine construction and manufacturing while contending with China's dominance in the global permanent magnet market, which poses significant competitive risks.
- Investment Risk Advisory: While the company has long-term potential, the numerous uncertainties involved suggest that investors should proceed with caution, and conservative investors might be better served by considering rare earth-focused metal exchange-traded funds (ETFs) to mitigate risk.
See More
USA Rare Earth Aims to Revolutionize Magnet Manufacturing
- Rare Earth Resource Advantage: USA Rare Earth controls the Round Top Mountain in Texas, which contains 15 of the 17 rare-earth metals and significant lithium deposits, and if successful, this could greatly enhance U.S. self-sufficiency in the rare-earth supply chain.
- Government Investment Support: In early 2026, the Trump administration announced a $1.6 billion deal to acquire a 10% stake in USA Rare Earth, with funds allocated for developing the Round Top mine and a magnet manufacturing facility in Oklahoma, highlighting government commitment to the project.
- Market Competition Risks: Despite federal backing, USA Rare Earth faces high costs associated with building its mine and manufacturing arm, along with fierce competition from China, which remains the dominant global supplier of permanent magnets, adding uncertainty to the project.
- Cautious Investment Advice: While USA Rare Earth has long-term potential, analysts suggest conservative investors consider metal exchange-traded funds (ETFs) to mitigate risks and achieve more stable returns, given the numerous unknowns surrounding the company’s future cash flow.
See More
USA Rare Earth Emerges as Top Meme Stock
- Significant Stock Returns: USA Rare Earth, Inc. (NASDAQ:USAR) has seen its shares rise over 60% year-to-date, with a notable surge in late January following news of U.S. government backing for a $1.6 billion funding, reflecting strong market confidence in its future prospects.
- Advancement in Financing Plans: On January 26, the company announced it received a letter of intent for a debt-and-equity package aimed at developing a rare-earth mine and magnet manufacturing facility in Texas, which is intended to enhance production of critical materials for defense and tech sectors while reducing reliance on Chinese supplies.
- Analyst Price Target Increases: Roth Capital raised its price target for USA Rare Earth from $25 to $35 on January 27 while maintaining a Buy rating, with analysts noting that the funding would bolster the company's prospects for establishing an end-to-end value chain for rare earth materials domestically.
- EBITDA Potential: Cantor Fitzgerald's analyst raised the price target from $28 to $35 on January 30, highlighting that magnet production could generate $1.2 billion in EBITDA by 2030, contingent on achieving key milestones.
See More
Competition Intensifies in U.S. Rare Earth Supply Chain
- Market Leadership: MP Materials owns the Mountain Pass mine in California, the only active rare-earth metals mine in the U.S., and is set to boost domestic magnet output to 10,000 metric tons through its Fort Worth Independence factory and the upcoming '10X Facility', thereby solidifying its market leadership.
- Financial Backing: In July 2025, MP Materials received a $400 million investment from the Department of Defense, which will fund the construction of its second magnet factory and includes a 100% purchase agreement for future production, significantly enhancing its financial stability and competitive edge.
- Future Potential: USA Rare Earth controls the Round Top deposit, one of the largest heavy rare-earth element deposits in the U.S., and while it is not operational yet, it aims for commercial production by 2028, potentially offering significant upside for investors if successful.
- Policy Impact: The Trump administration announced a $1.6 billion funding package for USA Rare Earth in early 2026 to support its mine development and the construction of its first magnet factory in Oklahoma, which will help reduce U.S. reliance on Chinese rare earths.
See More
Rising Importance of Rare Earth Materials in the U.S.
- Market Dynamics: MP Materials (NYSE: MP) has seen its stock rise by 14.6% in 2026, although it has retreated from a 16.3% increase at the end of January, indicating ongoing volatility in the rare earth sector and investor scrutiny.
- Government Support Agreement: USA Rare Earth secured $3.1 billion in government funding and private investment through an agreement with the U.S. government, which derisks its business plan and positively influences MP Materials' market outlook.
- Price Floor Risks: Unlike MP Materials, USA Rare Earth did not receive any price-floor commitments from the government, raising market concerns and leading to a sell-off in MP Materials' stock as investors reacted to uncertainties about future developments.
- Strategic Partnership Outlook: MP Materials signed a $500 million supply agreement with Apple, underscoring its critical role in the U.S. rare earth supply chain, and is expected to continue receiving government and market support despite facing political risks.
See More
