USA Rare Earth Q4 Earnings on the Deck: How to Approach the Stock Now?

Core Viewpoint - USA Rare Earth, Inc. (USAR) is expected to report a loss of 12 cents per share for Q4 2025, a downward revision from a previous estimate of a loss of 7 cents over the past 60 days [1][4]. Financial Performance - USAR reported a loss of 25 cents per share in the previous quarter and has a trailing two-quarter negative earnings surprise of 139.1% on average [1][2]. - The company has an Earnings ESP of -100.00%, indicating that the Most Accurate Estimate is a loss of 24 cents per share, which is worse than the Zacks Consensus Estimate [4]. Operational Developments - USAR is advancing its Stillwater facility in Oklahoma, preparing for early 2026 commissioning of Line 1a, which is designed to produce Neodymium Iron Boron (NdFeB) magnets [5][6]. - The company has been hiring and training engineers and technicians to operate the facility, which is expected to enhance its ability to reach commercial-scale production [7]. Financial Position - USAR has strengthened its balance sheet through PIPE financing, raising its cash position to over $400 million as of November 2025, and completed a $1.5 billion PIPE financing in January 2026 [8][16]. - The funding is aimed at upgrading the Stillwater plant and expanding magnet finishing capabilities to increase total NdFeB magnet production capacity to approximately 1,200 metric tons [8]. Strategic Acquisitions - USAR completed the acquisition of Less Common Metals in November 2025, which will supply critical metal and alloy feedstock for the Stillwater plant [9]. - The partnership with Solvay and Arnold Magnetic Technologies Corp. is expected to provide a stable source of rare-earth materials, supporting USAR's production efforts [9]. Market Performance - USAR shares have increased by 58.1% over the past six months, outperforming the S&P 500 and Zacks Mining - Miscellaneous industry growth [11]. - However, USAR has underperformed compared to other industry players like NioCorp Developments Ltd. and Aura Minerals Inc., which saw increases of 85.6% and 146.8%, respectively [11]. Valuation Metrics - USAR is trading at a forward price-to-earnings ratio of -69.54X, significantly higher than the industry average of 15.64X [14].