USA Rare Earth, Inc. (USAR): A Bull Case Theory 

We came across a bullish thesis on USA Rare Earth, Inc. on r/wallstreetbets by UnusedVacationHours. In this article, we will summarize the bulls’ thesis on USAR. USA Rare Earth, Inc.’s share was trading at $16.79 as of January 15th. USAR’s trailing P/E was 20.27 according to Yahoo Finance.

USA Rare Earth, Inc. engages in mining, processing, and supplying rare earths and other critical minerals in the United States. USAR is emerging as a strategically significant play in the U.S. critical minerals landscape, centered around its ownership of Round Top Mountain in Texas, the only major domestic deposit rich in heavy rare earth elements such as dysprosium and terbium. These materials are essential inputs for advanced defense systems like the F-35, EV motors, wind turbines, and precision-guided weapons, while China currently controls nearly all global heavy rare earth processing capacity.

The investment case has gained urgency amid renewed geopolitical focus on supply chain security, highlighted by renewed U.S. political rhetoric around rare earth access and China’s temporary suspension of export restrictions, which are expected to return by late 2026. USAR is positioning itself to capitalize on this window, with its Stillwater, Oklahoma magnet facility slated to begin production in Q1 2026 and the recent $100 million acquisition of Less Common Metals, the only scaled rare earth metal producer outside China, significantly strengthening downstream capabilities. Despite being pre-revenue and burning $10–15 million quarterly, the company holds a substantial $523 million cash balance, providing runway through initial commercialization.

The stock has corrected roughly 60% from its 2025 highs, leaving USAR at a $2.5 billion market cap versus MP Materials’ $10 billion valuation, despite Round Top’s heavy rare earth mix offering complementary exposure rather than direct overlap. The bull case hinges on execution at Stillwater, potential U.S. government backing similar to MP’s $400 million DoD investment, and a sharp repricing if China reinstates export controls.

However, risks remain meaningful, including repeated project delays, significant dilution exceeding 200% in 2025 with potential for more, lack of confirmed government funding, and competition from an already operational, profitable peer. The stock presents asymmetric upside tied to execution and policy support, but position sizing hinges on tolerance for dilution and timeline risk.

Previously, we covered a bullish thesis on MP Materials Corp. (MP) by Steve_Zissouu in April 2025, which highlighted the company’s vertically integrated U.S. rare earth operations, decoupling from China, and government support. MP’s stock price has appreciated by approximately 187.62% since our coverage. UnusedVacationHours shares a similar view but emphasizes USAR’s heavy rare earth exposure, Round Top project, and execution-driven upside.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.