USAR Stock Today: U.S. Buys 10% Stake in $1.6B Deal, January 26
USAR stock is in focus for Canadian investors after reports that the Trump administration will take a 10% stake in USA Rare Earth through a US$1.6 billion debt-and-equity package, paired with a separate US$1 billion private raise. The push aims to onshore rare earths and magnets, a strategic priority for defense and EV supply chains. At the last close, USAR traded near recent highs with strong volume. We review key levels, funding implications, and what this could mean for Canada’s critical minerals ecosystem.
Why Ottawa and Bay Street are watching
Reports indicate Washington will secure a 10% equity stake in USA Rare Earth as part of a US$1.6 billion package, a signal of long-term policy commitment to domestic magnets. That state backing can lower financing costs and de-risk offtakes, often a key bottleneck. Early reporting came via CNBC, framing this as a strategic move rather than a simple rescue.
Canada seeks a full critical minerals value chain to support EVs, aerospace, and defense. If USA Rare Earth scales magnets at home, North American buyers may shift contracts closer to end markets. That could tighten terms for suppliers and peers, including Canadian players, while improving price transparency and logistics. The Financial Times noted the initiative’s supply security angle.
Price action and technical setup
USAR stock last closed at US$22.71 after a session range of US$19.92 to US$23.85, with volume of 30,961,629 versus a 11,512,340 average. Year to date, shares are up 75.05% and 109.03% over one year. RSI sits at 58.02, a neutral reading, while ADX at 19.26 shows a weak trend. CCI at 111.69 flags near-term overbought conditions.
Initial support sits near US$19.92, with resistance around US$23.85 and a 52-week high at US$43.98. The 50-day and 200-day moving averages at US$15.46 and US$15.05 offer deeper support zones. Average True Range at 1.59 suggests wide daily swings, so position sizes matter. Traders may favor staggered entries while momentum stabilizes.
Fundamentals and funding outlook
USA Rare Earth posts EPS of -2.23 and a price-to-sales near 444x, with negative free cash flow, highlighting execution risk. Liquidity is strong, with a 16.5 current ratio and cash per share of 2.51. A quantitative model grades the company D+, yet seven analysts rate it Buy with a 4.0 consensus. This split demands careful sizing by investors.
If completed, the US$1.6 billion package and separate US$1 billion raise could fund magnet manufacturing and processing capacity. The next earnings update is set for February 25, 2026. Model-based projections point to US$24.89 in the next quarter and US$28.03 over a year, with multi-year scenarios rising further. Treat these as directional, not guarantees.
How Canadians might position
USAR stock offers high-beta exposure to North American magnets. Canadians can consider direct positions, diversified baskets of critical minerals equities, or pairing positions with cash to manage volatility. Currency matters. Some may keep a USD cash sleeve or hedge USD/CAD if they expect moves in the loonie.
Key risks include policy changes, permitting, execution, and dilution from large capital programs. Demand is tied to EVs, defense, and industrial cycles. If timelines slip or costs rise, valuation could compress quickly. Watch offtake progress, capex milestones, and any updates on the government’s 10% stake terms.
Final Thoughts
For Canadians, the reported US government stake is a clear signal that critical minerals and magnets are moving to the policy front line. USAR stock has strong momentum and news support, but the setup is volatile and the valuation looks full against negative earnings and cash burn. Funding, offtakes, and build-out speed now matter more than headlines. Consider phased entries, define risk with stops near recent support, and keep position sizes modest until trend strength improves. Track February 25 guidance, financing terms, and any updates on government involvement. This article is informational only and not investment advice. Always do your own research before committing capital.
FAQs
Why is USAR stock in focus today?
Reports say the Trump administration will take a 10% stake in USA Rare Earth via a US$1.6 billion package, alongside a US$1 billion private raise. That policy support could accelerate magnet capacity and offtakes, a key bottleneck. For investors, it raises the potential valuation floor, but execution and financing terms still matter.
Is USAR stock a buy for Canadian investors now?
It depends on risk tolerance. Momentum is strong and policy tailwinds help, but valuation is rich with negative EPS and free cash flow. A model grade of D+ contrasts with seven Buy ratings. Consider small, phased positions, clear stop-losses, and diversifying across multiple critical minerals names to spread risk.
What levels should traders watch on USAR stock?
Near-term support is around US$19.92, with resistance near US$23.85 and a 52-week high at US$43.98. The 50-day and 200-day moving averages at US$15.46 and US$15.05 are deeper support zones. RSI around 58 is neutral, while CCI above 100 signals near-term overbought conditions.
What are the biggest risks around USA Rare Earth now?
Policy timelines, permitting, execution, and dilution risks are front and centre. Large capital programs require on-time, on-budget delivery and strong offtakes. Demand depends on EVs, defense, and industrial cycles. Any slippage on financing terms, project milestones, or market demand could pressure the share price quickly.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
