The company continues to mitigate risks in its operations and is positioning itself for future growth.
Spoiler alert: The answer is “yes,” but as ever with investing, it’s not quite as clear-cut as that. If you believe the U.S. is heading into a long-term period of investment to secure a domestic supply of rare-earth magnets, then USA Rare Earth (USAR +6.42%) is an excellent stock to buy.
Unfortunately, that’s very difficult to predict. No one truly knows what the state of international trade relations or the pricing of rare-earth magnets will be in a year, let alone over a decade.
What we do know about USA Rare Earth
The company is making real progress in positioning itself to be a winner in any favorable scenario for domestically produced rare-earth magnets. While the political risk remains, as does the possibility of capital needs that could dilute existing shareholders’ interests, the company deserves considerable credit for mitigating its operational risks.
Today’s Change
(6.42%) $0.87
Current Price
$14.43
Key Data Points
Market Cap
$2.0B
Day’s Range
$13.73 – $14.45
52wk Range
$5.56 – $43.98
Volume
537K
Avg Vol
15M
Unlike its peer MP Materials, which is already sourcing materials from its Mountain Pass mine to feed its magnet-producing factories, USA Rare Earth plans to start producing magnets from non-China sources at its Stillwater, Oklahoma facility. After that, it plans to develop the Round Top Mountain deposit in Sierra Blanca, Texas.
Three steps in the right direction
Good news comes in threes. First, CFO William Steele affirmed that the company was on track “to essentially complete installing what we need for premanufacturing” by around the end of the first quarter of 2026.
Second, the company’s acquisition of Less Common Metals, a British rare-earth metal and alloy manufacturer that doesn’t source from China, helps derisk the stock as it ensures sourcing of materials for the Stillwater facility.
Image source: Getty Images.
Third, the company recently announced that it “now plans to begin commercial production in late 2028, two years earlier than previously anticipated” from Round Top Mountain.
These are positive developments, and if you are confident in the long-term opportunity for rare-earth magnets in the U.S., you can feel more confident in this company’s ability to capitalize on it.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.