USAR Gains 62.7% in the Past Year: Buy, Sell or Hold the Stock?

USA Rare Earth, Inc. USAR shares have surged 62.7% in the past year, outperforming both the industry and the S&P 500, which have returned 48.7% and 25.2%, respectively. In comparison, the company’s peers like NioCorp Developments Ltd. NB and MP Materials MP have gained 166.9% and 151.1%, respectively, over the same time frame.

USAR Outperforms Industry & S&P 500

Closing at $18.71 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. The stock is trading above its 200-day moving average but below the 50-day moving average, indicating a strong long-term trend despite some near-term softness.

USAR Stock’s 50-Day & 200-Day Moving Averages

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 advancing 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 anticipated 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 started hiring and training engineers and technicians to operate the facility. These efforts are expected 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. 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.

In March 2026, USA Rare Earth inked 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.

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.

Also, 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, 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 MP Materials.

USAR’s Estimate Revisions

The Zacks Consensus Estimate for USAR’s bottom line for 2026 has increased in the past 60 days.

Valuation

From a valuation standpoint, USA Rare Earth is trading at a forward price-to-earnings ratio of a negative 58.75X against the industry average of 14.43X. In comparison, NioCorp Developments and MP Materials are trading at a negative 9.02X and 214.89X, respectively.

Final Take

USA Rare Earth is advancing its Stillwater magnet facility toward commercial production while expanding its mine-to-magnet rare earth supply chain. The company strengthened its strategy through the acquisition of Less Common Metals and the planned purchase of Texas Mineral Resources to secure the Round Top Project. However, it remains pre-revenue and continues to incur losses as operating and R&D expenses are rising, which is expected 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.

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This article originally published on Zacks Investment Research (zacks.com).

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