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USA Rare Earth Crosses 50-Day SMA: Should You Buy the Stock Now?

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Key Takeaways

  • USAR crossed its 50-day moving average on Monday, signaling technical support despite trading below highs.
  • USAR is advancing its Stillwater magnet plant, with Line 1a assembly and commissioning planned for early 2026.
  • USAR raised over $400M and acquired Less Common Metals to secure feedstock and expand NdFeB output.

USA Rare Earth, Inc. (USAR - Free Report) crossed its 50-day simple moving average (SMA) on Monday, reaching a key support level from a technical perspective. The stock is also trading above its 200-day moving average, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.

USAR Overtakes the 50-Day Moving Average

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Shares of the company have jumped 52.1% in the past six months, outperforming the S&P 500 composite and Zacks Mining - Miscellaneous industry’s growth of 19.4% and 13.3%, respectively. However, USAR has lagged other key industry players like NioCorp Developments Ltd. (NB - Free Report) and Aura Minerals Inc. (AUGO - Free Report) , which have surged 110.5% and 117.9%, respectively, over the said time frame.

6-Month Price Performance

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Image Source: Zacks Investment Research

Closing at $16.73 on Thursday, the stock is trading below its 52-week high of $43.98 but higher than its 52-week low of $5.56. With investors’ sentiment starting to pick up for USAR, it is the right time to assess the stock’s potential upside. Let’s delve deeper.

Factors Driving USAR’s Performance

USA Rare Earth is working to move its Stillwater magnet manufacturing facility in Oklahoma closer to commercial production. The plant is designed to produce Neodymium Iron Boron (NdFeB) magnets, which are essential for defense, aviation, automotive and other high-growth applications. The Stillwater facility is expected to become one of the first large-scale magnet plants in the United States, supporting the country’s efforts to build a domestic rare earth supply chain.

USA Rare Earth is installing key equipment, assembling Line 1a and completing final preparations at the Stillwater facility for commissioning in early 2026. It is worth noting that the company began hiring and training engineers and technicians to operate the facility. These efforts are likely to improve USAR’s ability to reach commercial-scale production and help it secure long-term customer contracts.

USA Rare Earth also bolstered its balance sheet through PIPE financing and warrant exercises, bringing its total cash position to over $400 million as of November 2025. This funding is being used to make upgrades at the Stillwater plant, expand magnet finishing capabilities and complete Line 1b to increase total NdFeB magnet-producing capacity to roughly 1,200 metric tons.

USAR completed the acquisition of Less Common Metals in November 2025, which will supply critical metal and alloy feedstock for the Stillwater plant. In December 2025, LCM partnered with Solvay and Arnold Magnetic Technologies Corp. (Arnold) to provide a stable and premium-quality source of rare-earth materials. With this addition and continued progress across its development initiatives, the company is well positioned to expand capacity and scale production in the coming quarters.

However, since its inception, USA Rare Earth has remained in the exploration and research stages, incurring losses while yet to generate any revenues. Amid its project development phase, the company has been grappling with rising operational expenses, adversely impacting its margins and profitability. In third-quarter 2025, USAR’s selling, general and administrative expenses increased to $11.4 million from $0.8 million in the year-ago quarter due to a rise in legal & consulting costs, higher headcount & recruiting fees, and other costs..

Research and development expenses rose to $4.45 million compared with $1.16 million reported in the year-ago quarter due to an increase in employee-related expenses.

The lack of revenues and elevated expenses, partially offset by higher interest and dividend income from increased money market fund balances, resulted in a loss of 25 cents per share in the third-quarter.

USAR also operates in the mineral exploration and mining markets, which include major industry players like NioCorp Developments and Aura Minerals.

USAR’s Estimate Revisions

The Zacks Consensus Estimate for USAR’s bottom line for 2025 and 2026 has remained steady in the past 60 days.

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Image Source: Zacks Investment Research

Valuation

From a valuation standpoint, USA Rare Earth is trading at a forward price-to-earnings ratio of a negative 40.62X against the industry average of 17.04X. In comparison, NioCorp Developments and Aura Minerals are trading at a negative 12.15X and 6.42X, respectively.

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Image Source: Zacks Investment Research

Final Take

The steady progress at the Stillwater magnet manufacturing facility positions USA Rare Earth for a potential transformation as it moves toward commercial production. However, near-term challenges such as rising operating and development costs and the absence of revenues are likely to continue to impact this Zacks Rank #3 (Hold) company’s performance in the near term. 

While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains and provide a better entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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