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USAR Gains 70.5% in Six Months: Is This the Right Time to Buy the Stock?
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Key Takeaways
USAR commissioned Phase 1a at its Oklahoma magnet plant, targeting 600 metric tons by 2026.
USA Rare Earth secured $1.5B PIPE financing and potential CHIPS Act funding support.
USAR faces rising losses as expansion, hiring and development costs continue to pressure margins.
Shares of USA Rare Earth, Inc. (USAR - Free Report) have surged a solid 70.5% in the past six months. It outperformed both the industry and the S&P 500, which have returned 36.7% and 12.8%, respectively. In comparison, the company’s peers like MP Materials (MP - Free Report) and BHP Group Limited (BHP - Free Report) have declined 3.6% and increased 57.8%, respectively, over the same time frame.
USAR Outperforms Industry & S&P 500
Image Source: Zacks Investment Research
Closing at $24.39 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 $8.00. The stock 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
USAR has achieved a key milestone with the commissioning of Phase 1a of its commercial magnet production line at the Stillwater facility in Oklahoma. The development enables USAR to start fulfilling customer orders for sintered neodymium-iron-boron (NdFeB) permanent magnets in the second quarter of 2026.
During 2025, the company installed equipment, assembled Line 1a and prepared the Stillwater site for commercial commissioning in 2026. USAR also strengthened its operational capabilities by hiring and training engineers and technicians to support production scale-up and long-term customer agreements.
The successful commissioning demonstrates the facility’s ability to manage a complex, multi-step manufacturing process at commercial scale. The process converts rare earth and metallic elements into ultra-fine powder, which is refined through jet milling in a controlled environment before being shaped, coated and magnetized into NdFeB permanent magnets. These magnets are widely used across defense, aerospace, automotive and other fast-growing industries.
Phase 1a is expected to reach an annual run-rate production capacity of 600 metric tons by the end of 2026. The planned addition of Phase 1b is projected to double the Stillwater facility’s total capacity to 1,200 metric tons annually by the first quarter of 2027.
Once fully operational, the Stillwater facility is expected to become one of the first large-scale NdFeB magnet manufacturing plants in the United States, strengthening the domestic rare earth supply chain.
In May 2026, USAR received a $14.2 million grant from the Texas Semiconductor Innovation Fund to speed up the development of its Round Top Mountain rare earth project in West Texas. The project is expected to help build a U.S.-based supply chain for critical rare earth materials used in defense, semiconductors, AI and advanced technologies.
USAR strengthened its financial position through PIPE financing and warrant exercises. In January 2026, the company completed a $1.5 billion PIPE financing, with proceeds to be used for upgrades at the Stillwater facility, expansion of magnet finishing operations and completion of Line 1b, which is expected to raise total NdFeB magnet production capacity to approximately 1,200 metric tons.
In March 2026, USAR entered into a deal to acquire Texas Mineral Resources Corp. in an all-stock deal worth about $73 million. This will give the company full ownership and operational control of the Round Top Project. USAR expects commercial production at Round Top to begin in 2028, with a target to process around 40,000 metric tons of rare earth and critical mineral feedstock per day by 2030. Also, USAR completed the acquisition of Less Common Metals in November 2025, which will supply critical metal and alloy feedstock for the Stillwater plant.
In January 2026, USA Rare Earth entered into a non-binding Letter of Intent (the LOI) with the U.S. Department of Commerce and announced collaboration with the U.S. Department of Energy (DOE). The Department of Commerce’s CHIPS Program has provided an LOI entailing $277 million in proposed federal funding and a $1.3 billion senior secured loan under the CHIPS Act, a total of $1.6 billion.
However, the company remains in the early stages of commercial development and continues to incur losses as it scales its operations. Though it began generating revenues following the acquisition of Less Common Metals, rising operating expenses related to business expansion, acquisitions and workforce growth continue to weigh on profitability. In first-quarter 2026, USAR’s selling, general and administrative expenses increased to $21.2 million from $7 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 $14.2 million compared with $1.7 million reported in the year-ago quarter due to an increase in higher employee-related and development costs.
USAR operates in the mineral exploration and mining markets, which include major industry players like MP Materials and BHP Group.
USAR’s Estimate Revisions
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for USAR’s bottom line for 2026 has decreased 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 50.98X against the industry average of 15.22X. In comparison, BHP Group and MP Materials are trading at 16.36X and 135.53X, respectively.
Final Take
USAR recently commissioned Phase 1a of its commercial magnet production line at the Stillwater facility in Oklahoma and strengthened its long-term strategy through the acquisition of Less Common Metals and the planned acquisition of Texas Mineral Resources to secure full ownership of the Round Top Project. The company has also enhanced its growth prospects through significant financing initiatives, government support and expansion plans aimed at building a domestic rare earth supply chain.
However, despite beginning to generate revenues, USAR continues to incur losses as rising operating and research & development expenses related to expansion and commercialization are likely to weigh on its near-term performance. Holding on to this Zacks Rank #4 (Sell) company at present does not seem prudent.
View the Zacks #1 Rank List
Image: Bigstock
USAR Gains 70.5% in Six Months: Is This the Right Time to Buy the Stock?
Key Takeaways
Shares of USA Rare Earth, Inc. (USAR - Free Report) have surged a solid 70.5% in the past six months. It outperformed both the industry and the S&P 500, which have returned 36.7% and 12.8%, respectively. In comparison, the company’s peers like MP Materials (MP - Free Report) and BHP Group Limited (BHP - Free Report) have declined 3.6% and increased 57.8%, respectively, over the same time frame.
USAR Outperforms Industry & S&P 500
Image Source: Zacks Investment Research
Closing at $24.39 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 $8.00. The stock 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
USAR has achieved a key milestone with the commissioning of Phase 1a of its commercial magnet production line at the Stillwater facility in Oklahoma. The development enables USAR to start fulfilling customer orders for sintered neodymium-iron-boron (NdFeB) permanent magnets in the second quarter of 2026.
During 2025, the company installed equipment, assembled Line 1a and prepared the Stillwater site for commercial commissioning in 2026. USAR also strengthened its operational capabilities by hiring and training engineers and technicians to support production scale-up and long-term customer agreements.
The successful commissioning demonstrates the facility’s ability to manage a complex, multi-step manufacturing process at commercial scale. The process converts rare earth and metallic elements into ultra-fine powder, which is refined through jet milling in a controlled environment before being shaped, coated and magnetized into NdFeB permanent magnets. These magnets are widely used across defense, aerospace, automotive and other fast-growing industries.
Phase 1a is expected to reach an annual run-rate production capacity of 600 metric tons by the end of 2026. The planned addition of Phase 1b is projected to double the Stillwater facility’s total capacity to 1,200 metric tons annually by the first quarter of 2027.
Once fully operational, the Stillwater facility is expected to become one of the first large-scale NdFeB magnet manufacturing plants in the United States, strengthening the domestic rare earth supply chain.
In May 2026, USAR received a $14.2 million grant from the Texas Semiconductor Innovation Fund to speed up the development of its Round Top Mountain rare earth project in West Texas. The project is expected to help build a U.S.-based supply chain for critical rare earth materials used in defense, semiconductors, AI and advanced technologies.
USAR strengthened its financial position through PIPE financing and warrant exercises. In January 2026, the company completed a $1.5 billion PIPE financing, with proceeds to be used for upgrades at the Stillwater facility, expansion of magnet finishing operations and completion of Line 1b, which is expected to raise total NdFeB magnet production capacity to approximately 1,200 metric tons.
In March 2026, USAR entered into a deal to acquire Texas Mineral Resources Corp. in an all-stock deal worth about $73 million. This will give the company full ownership and operational control of the Round Top Project. USAR expects commercial production at Round Top to begin in 2028, with a target to process around 40,000 metric tons of rare earth and critical mineral feedstock per day by 2030. Also, USAR completed the acquisition of Less Common Metals in November 2025, which will supply critical metal and alloy feedstock for the Stillwater plant.
In January 2026, USA Rare Earth entered into a non-binding Letter of Intent (the LOI) with the U.S. Department of Commerce and announced collaboration with the U.S. Department of Energy (DOE). The Department of Commerce’s CHIPS Program has provided an LOI entailing $277 million in proposed federal funding and a $1.3 billion senior secured loan under the CHIPS Act, a total of $1.6 billion.
However, the company remains in the early stages of commercial development and continues to incur losses as it scales its operations. Though it began generating revenues following the acquisition of Less Common Metals, rising operating expenses related to business expansion, acquisitions and workforce growth continue to weigh on profitability. In first-quarter 2026, USAR’s selling, general and administrative expenses increased to $21.2 million from $7 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 $14.2 million compared with $1.7 million reported in the year-ago quarter due to an increase in higher employee-related and development costs.
USAR operates in the mineral exploration and mining markets, which include major industry players like MP Materials and BHP Group.
USAR’s Estimate Revisions
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for USAR’s bottom line for 2026 has decreased 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 50.98X against the industry average of 15.22X. In comparison, BHP Group and MP Materials are trading at 16.36X and 135.53X, respectively.
Final Take
USAR recently commissioned Phase 1a of its commercial magnet production line at the Stillwater facility in Oklahoma and strengthened its long-term strategy through the acquisition of Less Common Metals and the planned acquisition of Texas Mineral Resources to secure full ownership of the Round Top Project. The company has also enhanced its growth prospects through significant financing initiatives, government support and expansion plans aimed at building a domestic rare earth supply chain.
However, despite beginning to generate revenues, USAR continues to incur losses as rising operating and research & development expenses related to expansion and commercialization are likely to weigh on its near-term performance. Holding on to this Zacks Rank #4 (Sell) company at present does not seem prudent.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.