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USA Rare Earth Surges 35.6% in 3 Months: Should You Buy the Stock Now?
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Key Takeaways
USAR shares rose 35.6% in three months as the Stillwater magnet plant nears commercial production.
USA Rare Earth secured $1.5B PIPE financing to expand NdFeB capacity to about 1,200 metric tons.
USAR posted a Q3 loss amid rising SG&A and R&D costs while remaining pre-revenue.
USA Rare Earth, Inc. (USAR - Free Report) shares have climbed 35.6% in the past three months, underperforming the industry and outperforming the S&P 500, which have returned 35.6% and 3%, respectively. In comparison, the company’s peers like NioCorp Developments Ltd. (NB - Free Report) and BHP Group Limited (BHP - Free Report) have gained 4.2% and 34.5%, respectively, over the same time frame.
USAR Underperforms Industry & Outperforms S&P 500
Image Source: Zacks Investment Research
Closing at $19.40 in the last trading session, the stock is trading below its 52-week high of $43.98 but higher than its 52-week low of $5.56. It is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and confidence in the company's long-term prospects.
USAR Stock’s 50-Day & 200-Day Moving Averages
Image Source: Zacks Investment Research
Let’s take a look at USAR’s fundamentals to better analyze how to play the stock.
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 more than $400 million as of November 2025. It is worth noting that the company completed the $1.5 billion PIPE financing in January 2026. 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 quarters ahead.
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 operates in the mineral exploration and mining markets, which include major industry players like NioCorp and BHP Group.
USAR’s Estimate Revisions
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for USAR’s bottom line for 2026 has increased in the past 60 days.
Valuation
Image Source: Zacks Investment Research
From a valuation standpoint, USA Rare Earth is trading at a forward price-to-earnings ratio of a negative 67.43X against the industry average of 16.05X. In comparison, NioCorp Developments and BHP Group are trading at a negative 10.71X and 15.6X, respectively.
Final Take
Steady progress at the Stillwater magnet manufacturing facility indicates that USA Rare Earth is advancing toward commercial production. However, elevated operating and development costs, along with the absence of current revenues, are expected to continue to weigh on this Zacks Rank #3 (Hold) company’s near-term performance.
View the Zacks #1 Rank List
Image: Bigstock
USA Rare Earth Surges 35.6% in 3 Months: Should You Buy the Stock Now?
Key Takeaways
USA Rare Earth, Inc. (USAR - Free Report) shares have climbed 35.6% in the past three months, underperforming the industry and outperforming the S&P 500, which have returned 35.6% and 3%, respectively. In comparison, the company’s peers like NioCorp Developments Ltd. (NB - Free Report) and BHP Group Limited (BHP - Free Report) have gained 4.2% and 34.5%, respectively, over the same time frame.
USAR Underperforms Industry & Outperforms S&P 500
Image Source: Zacks Investment Research
Closing at $19.40 in the last trading session, the stock is trading below its 52-week high of $43.98 but higher than its 52-week low of $5.56. It is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and confidence in the company's long-term prospects.
USAR Stock’s 50-Day & 200-Day Moving Averages
Image Source: Zacks Investment Research
Let’s take a look at USAR’s fundamentals to better analyze how to play the stock.
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 more than $400 million as of November 2025. It is worth noting that the company completed the $1.5 billion PIPE financing in January 2026. 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 quarters ahead.
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 operates in the mineral exploration and mining markets, which include major industry players like NioCorp and BHP Group.
USAR’s Estimate Revisions
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for USAR’s bottom line for 2026 has increased in the past 60 days.
Valuation
Image Source: Zacks Investment Research
From a valuation standpoint, USA Rare Earth is trading at a forward price-to-earnings ratio of a negative 67.43X against the industry average of 16.05X. In comparison, NioCorp Developments and BHP Group are trading at a negative 10.71X and 15.6X, respectively.
Final Take
Steady progress at the Stillwater magnet manufacturing facility indicates that USA Rare Earth is advancing toward commercial production. However, elevated operating and development costs, along with the absence of current revenues, are expected to continue to weigh on this Zacks Rank #3 (Hold) company’s near-term performance.
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.