Key Takeaways
- USA Rare Earth stock fell 36% in the past month to a 52-week low, and the company put out no news that would explain the drop.
- The slide came during a selloff in speculative and rare-earth stocks, after USA Rare Earth had closed its $2.8 billion Serra Verde deal and named Thras Moraitis CEO.
- Analysts expect revenue to climb from almost nothing in 2025 to $1.58 billion in 2028, and their average price target sits far above today’s price.
- The selling looks overdone, but the third-quarter report on Nov. 9, the first under Moraitis, has to show that combining the businesses is on track.
USA Rare Earth (USAR) stock has lost 36% in the past month and closed Monday at a new 52-week low. The odd part: the company’s own news over that stretch gave investors little reason to sell.
Nothing broke at the company
USA Rare Earth didn’t put out any bad news in the past month. Instead, it got caught in a selloff in high-beta stocks, as the Nasdaq 100 fell 9% over the same stretch.
Rare-earth names had it worse. When big-tech earnings dragged the Nasdaq 100 down 4% on Oct. 30, USA Rare Earth fell with MP Materials, Critical Metals and TMC. Even its one big bounce of the month came in a rally across critical-minerals stocks, and the company had no news behind that either.
The trade had started cooling before the month began, too: US rare-earth stocks, USA Rare Earth included, fell as President Trump met China’s Xi Jinping in late September.
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A much bigger company, with a new boss
Meanwhile, the business changed a lot. USA Rare Earth closed its $2.8 billion combination with Serra Verde on Sept. 3. The deal added a working mine and processing plant in Brazil to a business that already stretched from the Round Top project in Texas to magnet production in the US.
When it announced the deal in April, management projected that Serra Verde would reach an annualized run-rate EBITDA of $550 million to $650 million by the end of 2027 (assuming it sells all its output as separated oxides).
Thras Moraitis, previously president, took over as CEO on Oct. 1 and split the company into three units: Upstream (mining, processing and separation), Midstream (metals, alloys and powders) and Downstream (magnets).
“Our immediate priority is to bring these businesses together, establish clear accountability and execute reliably for customers,” Moraitis said as he took the job.
And on Oct. 20, Texas Capital initiated coverage with a Buy rating and a $28 price target. The stock kept falling anyway.
Wall Street still expects a steep ramp
Analysts expect revenue to go from almost nothing in 2025 to $1.58 billion in 2028:
Nothing in the past month’s news gives them a reason to cut those numbers, though only five analysts forecast 2028 and three forecast 2029.
After the slide, the stock trades at 9.7x the sales analysts expect over the next 12 months, as of Monday’s close.
Paying for all the building the company has to do is the bigger question. USA Rare Earth ended 2025 with $360 million in cash and short-term investments, up from $16.8 million a year earlier:
The third-quarter report will be the first look at the balance sheet with Serra Verde in it.
Overdone, but Nov. 9 is the real test
Nine analysts cover USA Rare Earth, and their $35 average price target is nearly four times Monday’s close.
I think the selling is overdone. Over the past two months the company became a producer and put a new CEO in charge of pulling it together, while the stock fell with its whole corner of the market.
The risk is that the company still has almost no revenue, and investors have been dumping speculative stocks wholesale. A good quarter may not stop the selling if the Nasdaq keeps sliding.
USA Rare Earth reports third-quarter results after the close on Monday, Nov. 9, its first report under Moraitis. Watch for progress on combining Serra Verde with the rest of the company, deliveries to customers, and how management plans to pay for the buildout.
So what is USA Rare Earth stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
