Key Stats for USA Rare Earth Stock
- 1- Year Price Change for USAR stock: 120%
- $USAR Share Price as of Jan. 26: $26.72
- 52-Week High: $44
- $USAR Share Price Target: $29.20
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
USA Rare Earth (USAR) stock rallied on Monday after the critical minerals startup announced a transformative deal with the U.S. Department of Commerce.
- The government will provide USA Rare Earth with $1.3 billion in loans and $277 million in federal funding under a letter of intent signed between the two parties.
- In exchange for this support, USA Rare Earth will issue the Department of Commerce 16.1 million shares of common stock and 17.6 million warrants.
- This gives the U.S. government an 8% to 16% stake in the company depending on whether the warrants are exercised, according to an SEC filing.
USAR stock initially surged as much as 29% in early trading before settling to close up about 8% at $26.72 per share.
The company will also raise $1.5 billion from private investors through a significantly oversubscribed PIPE transaction, bringing total available capital to approximately $3.5 billion when combined with existing cash.
“This is a watershed moment in our work to secure and grow a resilient and independent rare earth value chain based in this country,” CEO Barbara Humpton told analysts on a conference call Monday. “We have long said that meeting the urgent call to reshore the rare earth and critical minerals industry will require a multiplayer solution, and this establishes our company as one of the leaders.”
See analysts’ growth forecasts and price targets for USAR stock (It’s free!) >>>
What the Market Is Telling Us About USAR Stock
The strong market reaction to the Commerce Department deal reflects investor enthusiasm about USA Rare Earth’s strategic positioning in the critical minerals supply chain.
Rare earths are essential inputs for strategic industries including defense, semiconductors, electric vehicles and robotics.
Currently, the U.S. remains heavily dependent on China for rare earth imports, making domestic production a national security priority.
USA Rare Earth is the latest mining company to receive government backing as the Trump administration works to build a Western rare earth and critical minerals supply chain.
The Defense Department struck a similar landmark deal with MP Materials last summer that included an equity stake, price floor and offtake agreement. The administration also took stakes in Lithium Americas and Trilogy Metals last year.
However, the USA Rare Earth agreement differs in one important way: it does not include price floors or offtake agreements.
CFO Rob Steele explained this is because the minerals at the company’s Round Top deposit in Sierra Blanca, Texas are “in dramatic undersupply outside of China” and command premium pricing.
“Think dysprosium, think terbium, think yttrium,” Steele said on the call. “These are all things that actually are not produced in any large quantities outside of China.” He noted that dysprosium trades at $900 per kilogram while terbium fetches $3,500 per kilogram.
- The government funding will be disbursed from 2026 through 2028 based on operational milestones.
- USA Rare Earth plans to reach 10,000 metric tons of annual magnet production capacity by June 2030, begin commissioning its Stillwater, Oklahoma magnet plant in Q1 2026, and start commercial mining at Round Top in late 2028—two years earlier than previously planned.
- The company projects reaching gross profit breakeven in 2027, EBITDA breakeven in 2028, and cash flow breakeven in 2029.
- For 2030, management is targeting $2.6 billion in revenue, $1.2 billion in EBITDA, and $900 million in free cash flow.
However, USAR stock faces some near-term uncertainty.
The deal with Commerce is subject to several conditions including raising at least $500 million from non-government sources (satisfied by the PIPE), securing two memorandums of understanding with semiconductor users, obtaining feedstock supply agreements through 2027, and defining a power plan for the magnet facility.
The company also needs to raise approximately $600 million in additional equity capital beyond what’s been announced to fully fund its $4.1 billion business plan. Management said this could come from strategic investments or institutional investors.
Despite these execution risks, the government’s backing validates USA Rare Earth’s business model and positions it as a key player in reshoring critical mineral production.
“This investment ensures our supply chains are resilient and no longer reliant on foreign nations,” Commerce Secretary Howard Lutnick said in a statement.
Estimate a company’s fair value instantly (Free with TIKR) >>>
How Much Upside Does USAR Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
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 stocks mentioned. Thank you for reading, and happy investing!
