Down 69% From Its Recent Peak, Is USA Rare Earth Stock a Buy?

Core Viewpoint - The U.S. is shifting focus to domestic suppliers of crucial minerals, particularly rare-earth elements, to reduce reliance on China, which currently dominates the mining and processing of these materials [1][4][5]. Company Overview - USA Rare Earth is pursuing a vertically integrated "mine to magnet" strategy, aiming to become one of the few integrated rare-earth companies in the U.S. [2][11]. - The company has no history of commercial operations and has not generated revenue since its inception in 2019 [8][12]. - It is currently developing an industrial plant in Stillwater, Oklahoma, expected to be commissioned in the first quarter of 2026 [8]. Market Context - The U.S. is heavily dependent on China for rare-earth minerals, which poses national security risks, especially amid geopolitical tensions [5][6]. - Recent export controls by China on rare-earth elements have heightened concerns about supply chain disruptions [5]. Strategic Developments - USA Rare Earth has acquired Less Common Metals (LCM), enhancing its ability to produce strategic rare-earth metals and alloys [9]. - The company holds a majority stake in the Round Top mine in Texas, which is undergoing a feasibility study, with production not anticipated until 2033 [10]. Financial Projections - Analysts project that USA Rare Earth could earn $41 million in revenue next year and $165 million by 2027, despite currently generating no revenue [12]. - The stock is considered speculative and volatile, with a significant drop from nearly $44 per share in October to a current price of $17.48 [3][5]. Investment Considerations - The company is seen as a story-driven stock that could benefit from U.S. government investments or funding to support its growth [13]. - It is best suited for aggressive growth investors due to its high-risk nature and potential for price volatility [3][13].