USA Rare Earth, Inc. USAR has been selected to secure a maximum of $19.3 million in funding from the U.S. Department of Energy (DOE). The funding will help advance the development of rare earth element (REE) processing capabilities in the United States. The funding is subject to final approval.
The project is estimated to be worth approximately $50.5 million, with as much as $19.3 million anticipated from DOE funding and the balance expected to come from non-government sources.
The project aims to build a pilot-scale facility for separating rare earth elements, an important step in making these materials usable for industries such as clean energy, electronics, defense and advanced manufacturing. Rare earth elements are critical for products like electric vehicles, wind turbines, smartphones and military equipment.
At present, rare earth processing is heavily concentrated in a few regions globally, creating supply-chain risks for countries that rely on these materials. By increasing domestic processing capacity, the project is expected to help improve supply-chain security and reduce dependence on overseas sources. The funding selection reflects growing efforts in the United States to strengthen domestic rare earth production and processing, which are important for energy, technology and national security needs.
Also, in January 2026, USA Rare Earth entered into a non-binding Letter of Intent (LOI) with the U.S. Department of Commerce and announced collaboration with the U.S. Department of Energy (DOE). The Department of Commerce’s CHIPS Program has provided an LOI entailing $277 million in proposed federal funding and a $1.3 billion senior secured loan under the CHIPS Act, a total of $1.6 billion.
Snapshot of USAR's Peers
Among its major peers, MP Materials Corp. MP has received federal support to strengthen rare earth processing and magnet manufacturing in the United States. MP Materials has been expanding domestic production capabilities to support industries such as electric vehicles, renewable energy, electronics and defense. These efforts by MP Materials are aimed at reducing dependence on overseas rare earth supply chains and improving supply security.
Energy Fuels Inc. UUUU has been expanding its rare earth processing efforts as part of a strategy focused on critical minerals. Energy Fuels is working to strengthen domestic and North American supply capabilities for materials used in clean energy, technology and defense industries. These initiatives reflect growing efforts to build a more secure and diversified critical minerals supply chain.
USAR’s Price Performance, Valuation & Estimates
Shares of USAR have gained 105.3% in the past six months compared with the industry’s growth of 36%.
Image Source: Zacks Investment Research
From a valuation standpoint, USAR is trading at a forward price-to-earnings ratio of negative 85.96X against the industry’s average of 15.68X. USA Rare Earth has a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for USAR’s 2026 earnings has decreased over the past 60 days.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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MP Materials Corp. (MP): Free Stock Analysis Report
Energy Fuels Inc (UUUU): Free Stock Analysis Report
USA Rare Earth Inc. (USAR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).