Buffett Brain · Research note
Score updated 29 Oct 2026
USAR· Materials
USA Rare Earth
USA Rare Earth's negative net margin and ROIC of 5.2% indicate a lack of durable competitive advantage.
Buffett fit
Weak fit
Owner
50
Durability
11
Management
20
Price
55
Score updated 29 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Materials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of USA Rare Earth, we'd be concerned about the negative net margin of -130.2% and the of 5.2%, which is below the sector's top quintile.
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The company's long-term durability is questionable due to its negative net margin and low .
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USA Rare Earth's appears to be suboptimal, with a share count CAGR of 4.96% indicating dilution.
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The current valuation metrics, such as a of -6.8 and an yield of -3.6%, do not provide a .
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- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 79.3% is top-quintile within the sector.
- 2 of 34% also ranks in the top-quintile.
- 3Interest coverage is exceptionally high at 4734.5, indicating ability to cover interest expenses.
- 4No debt on the balance sheet, with a debt/equity ratio of 0.00.
Concerns
6- 1Net margin of -130.2% indicates significant unprofitability.
- 2 of 5.2% is below the sector's top-quintile cutoff of 12.6%.
- 35-year average of -30% shows historical value destruction.
- 4Share count CAGR of 4.96% suggests dilution without corresponding shareholder returns.
Price history
$10.48+3.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
USA Rare Earth operates as a magnet manufacturing company, focusing on NdFeB magnet manufacturing and mineral processing. It serves various industries such as defense and automotive. The company's is a high 79.3%, indicating strong , but its net margin is a concerning -130.2%. The unit economics are challenged by negative profitability.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 28, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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