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USA Rare Earth (USAR) Valuation Review After 28% Weekly Gain and 50% One-Year Share Price Rally

Simply Wall St · 2d ago

USA Rare Earth (USAR) has quietly put together a strong run, with the stock up roughly 28% over the past week and nearly 50% in the past year, drawing fresh investor attention.

See our latest analysis for USA Rare Earth.

The latest move looks like momentum building rather than a one off spike, with a 7 day share price return of 28.03% contributing to a 49.87% one year total shareholder return from a starting point below the current 17.22 dollars share price.

If that kind of momentum has your attention, it might be worth comparing USAR with other niche materials names and discovery stories through fast growing stocks with high insider ownership.

With analysts still seeing nearly 60 percent upside to their price targets despite heavy recent gains, the question now is whether USA Rare Earth remains undervalued or if the market is already pricing in its future growth.

DCF Valuation Points to Deep Discount

Our DCF model estimates a fair value of approximately 40.06 dollars per share for USA Rare Earth, versus the latest close at 17.22 dollars, implying the stock trades at roughly a 57 percent discount.

The SWS DCF model projects the company’s future cash flows and then discounts them back to today using an appropriate required return, producing a single present value estimate for the equity. This approach is particularly important for early stage or unprofitable names like USAR, where traditional earnings based multiples are hard to use and near term losses can obscure the longer term cash generation potential.

For a critical minerals developer with forecast rapid revenue expansion but ongoing losses, anchoring on discounted future cash flows provides a clearer lens than current profitability. It ties the valuation to the pace and scale of expected project ramp up, rather than today’s zero revenue snapshot or negative equity position.

Look into how the SWS DCF model arrives at its fair value.

Result: DCF Fair value of $40.06 (UNDERVALUED)

However, USA Rare Earth still faces execution and financing risks, with zero current revenue and continued losses that could delay or dilute the growth story.

Find out about the key risks to this USA Rare Earth narrative.

Build Your Own USA Rare Earth Narrative

If you see the story differently or simply prefer to dive into the numbers yourself, you can build a custom view in just a few minutes: Do it your way.

A great starting point for your USA Rare Earth research is our analysis highlighting 2 key rewards and 5 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.