A look at the valuation swings shaping investor sentiment
New York, USA, November 21, 2025 – USA Rare Earth (USAR) has been on a roller coaster ride, with its share price falling 6% in the past day and 15% over the past week. These sudden drops have pushed investors to re-evaluate whether the stock is now attractively priced or still risky in the long run.
Despite the recent decline, the company’s total shareholder return over the past year stands at an impressive 33.4%. The shift in momentum reflects changing expectations around the company’s growth prospects and how much risk the market is willing to accept as it steps into its next phase.
With specialty materials and rare earth companies experiencing frequent ups and downs, many investors are widening their search for fast-growing stocks with strong insider ownership. USA Rare Earth remains at the center of that conversation.
The key question is whether this pullback has created a long-term value opportunity or if the market has already factored in all of USA Rare Earth’s future potential.
DCF Model Suggests Deep Undervaluation
According to the SWS discounted cash flow (DCF) model, USA Rare Earth has an estimated fair value of 41.48 dollars per share, compared to its latest closing price of 14.30 dollars. This large gap suggests the stock may be significantly undervalued.
The DCF method looks at the company’s expected future cash flows and brings them back to their present-day value. It focuses on long-term earnings power rather than short-term market swings.
With USA Rare Earth projected to grow revenue quickly, even though it still isn’t profitable, the DCF model gives more weight to its future potential. Since the rare earth sector is known for being both volatile and early-stage in nature, these long-term assumptions play a big role in shaping the estimated value.
Result: DCF fair value of 41.48 dollars is potentially undervalued at current levels.
However, since the company is not yet profitable and the broader sector often reacts sharply to shifts in investor sentiment, valuations could change quickly if growth slows or confidence dips.
Understanding the Risks
Like any investment, USA Rare Earth comes with its share of uncertainties. Investors should consider key risks such as market volatility, cash flow pressure, and the competitive landscape in rare earth and specialty materials.
Build Your Own Outlook
Investors are encouraged to review the numbers and develop their own view of whether USA Rare Earth fits their long-term strategy. It takes only a few minutes to explore the financials and decide what narrative resonates with your investment style.
A helpful place to begin is our breakdown of two key potential rewards and five important warning signs that could shape your decision.
