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USA Rare Earth: Progress Over Perfection

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  • USA Rare Earth is rapidly scaling a vertically integrated rare earths business, yet the market remains skeptical of its long-term profitability.
  • The recent quarterly results weren't impressive, but the numbers aren't relevant; focus on operational milestones, customer pipeline, and magnet production ramp at Stillwater and future expansions.
  • USAR's valuation appears compelling, targeting $1.85B adjusted EBITDA by 2030 and ~80% free cash flow conversion, with debt expected to be generally covered by 2030.
  • The stock is cheap at about 3.5x adjusted EBITDA targets with dips down to the $15 range—great buying opportunities.

USA Rare Earth, Inc. (USAR) is quickly building a rare earth powerhouse, but the stock market still isn't convinced of a profitable future. The company is early in the development process, leading to some confusion over financial results. My investment thesis remains ultra bullish on the stock, especially back at the recent lows when the stock market loses interest in rare earth stocks.


Read the full article on Seeking Alpha. 

Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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