USA Rare Earth (USAR) Stock Just Beat Earnings. So Why Is It Falling?

TLDR

• USAR stock dropped around 14% in a “sell the news” reaction after Q1 earnings beat expectations.
• Despite the beat, Wall Street doesn’t expect USAR to turn a profit before 2028 or generate cash flow before 2029.
• The stock had already surged 72% in April after a string of positive developments.
• In April, USAR secured rare-earth material rights and a $2.8 billion deal to acquire Brazil’s Serra Verde Group.
• Near-term catalysts include ramping metal and magnet manufacturing in 2026 and a Round Top feasibility study due in early 2027.

USA Rare Earth (USAR) stock fell roughly 14% on Monday as investors booked profits following the company’s first-quarter earnings release.

USA Rare Earth Inc, USAR

The results beat analyst expectations, but the report also reminded the market of a hard truth: this is still a loss-making company with profitability years away.

According to S&P Global Market Intelligence data, Wall Street doesn’t expect USAR to post earnings before 2028 or generate positive cash flow before 2029. That’s a long runway for investors to sit on.

The selloff follows a massive April run-up. USAR surged 72% last month after a series of genuinely encouraging developments on its domestic rare earth strategy.

That April rally was driven by two key announcements. First, the company secured rights to rare-earth raw materials from outside China. Second, it signed a $2.8 billion agreement to acquire Brazil’s Serra Verde Group, which owns a rare-earth mine and processing plant.

With those catalysts already reflected in the price, the earnings release became more of an exit point than a reason to buy. Classic “sell the news” behavior.

From Mine to Magnet — But Not Yet

USAR’s core strategy is unusual. The plan is to produce metals and magnets before its flagship Round Top mine in Texas comes online in 2028.

That means the company needs to lock down non-China raw material supply now, and manufacture products from it, all ahead of its own mine producing anything. It’s an ambitious sequence, and the Serra Verde acquisition was a direct move to address that supply gap.

The feasibility study for Round Top is expected to be completed in 2026 and published in early 2027.

What’s Next for USAR

On the near-term roadmap, management is focused on ramping up metal and magnet manufacturing capacity through 2026.

That ramp is important. It turns USAR from a story stock into something that actually makes and sells product — a step that could help bridge the gap to Round Top’s eventual production.

Despite Monday’s drop, the stock is still up over 104% year-to-date. The selloff looks more like profit-taking than a fundamental shift in the thesis.

A broader rotation away from riskier, high-growth names also added pressure on the day, compounding the post-earnings dip.

USAR’s average daily trading volume sits at over 15 million, which points to how actively traded — and speculative — this stock remains.

The company’s current market cap stands at approximately $5.32 billion.

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