USA Rare Earth Shares Tumble 6.03% on Earnings Miss Surge to 14.5M Volume Rank 467th in Trading Activity Amid Sector Sell-Off

Market Snapshot

On January 13, 2026, USA Rare Earth (USAR) shares fell 6.03%, closing at $16.67, a drop from the previous close of $17.74. Trading volume surged to 14.5 million shares, 18% above the average daily volume of 12.25 million shares. The stock’s performance placed it at the 467th highest trading volume for the day, with a market capitalization of $2.21 billion. The decline followed a disappointing earnings report and a broader sell-off in the rare earth sector.

Key Drivers

Earnings Miss and Analyst Reactions

USA Rare Earth’s Q3 2025 results were a major catalyst for the selloff. The company reported a net loss of $156.7 million, or $1.64 per share, far worse than the forecasted $0.06 loss per share. Adjusted losses also came in at $0.25 per share, missing expectations by 316.67%. This marked the second consecutive quarter of significant earnings shortfalls, with Q2 2025 seeing a 33.33% EPS surprise and Q3 2024 missing forecasts by 316.67%. The earnings miss triggered an after-hours drop of 6.28%, pushing the stock to $16.87. Analysts highlighted the company’s inability to meet even pessimistic estimates, with some noting the lack of clarity on the timeline for its LCM acquisition and defense sector expansion.

Strategic Plans and Capital Position

Despite the earnings disappointment, USA Rare Earth maintains a strong balance sheet, with $257.7 million in cash and an additional $123 million expected from warrant exercises. The company reiterated its debt-free status and plans to commission a magnet manufacturing facility in Q1 2026. Expansion targets in the U.S., UK, and Europe, including a strategic investment in France, were cited as long-term growth drivers. However, investors appeared skeptical about the timeline for profitability, particularly given the company’s history of operational losses. CEO Barbara Humpton emphasized a collaborative industry approach, but analysts questioned the feasibility of scaling production before 2026.

Analyst Ratings and Institutional Activity

The stock’s 6% decline occurred despite a generally positive analyst outlook. Six research firms, including Roth Capital, UBS, and Canaccord Genuity, maintained “Buy” ratings, with a consensus price target of $26.33. However, Weiss Ratings issued a rare “Sell (D-)" rating in December 2025, citing concerns over valuation and operational risks. Institutional investors showed mixed activity, with SBI Securities Co. Ltd. increasing its stake by 10,448% in Q2 2025 and Geode Capital Management boosting holdings by 2,437.5%. Conversely, some funds reduced exposure, reflecting uncertainty about the company’s path to profitability. The stock’s beta of 0.96 and negative P/E ratio (-32.06) further underscored its volatility and lack of earnings traction.

Sector and Market Context

The rare earth sector faces broader headwinds, including geopolitical tensions and supply chain uncertainties. USA Rare Earth’s focus on domestic production in West Texas aligns with U.S. government priorities but requires significant capital expenditure. While the company’s Round Top project and planned separation facility aim to secure rare earth supply chains, competitors in China and elsewhere continue to dominate pricing and production. Analysts noted that the stock’s decline mirrored sector-wide weakness, with rare earth equities underperforming due to macroeconomic concerns and subdued demand growth.

Conclusion

The 6.03% drop in USAR shares reflects a combination of near-term earnings disappointment, skepticism about strategic timelines, and sector-specific challenges. While the company’s cash reserves and expansion plans provide a buffer, the lack of consistent profitability and analyst divergence highlight ongoing risks. Investors will likely monitor Q1 2026 developments, particularly the commissioning of the magnet facility and progress on the LCM acquisition, to gauge whether the stock can regain momentum.