USA Rare Earth Sits on $1.5 Billion in Cash and Almost No Revenue. Here's How to Value That

USAR holds $1.53 billion in cash against a $4.4 billion market cap after going public via SPAC merger in 2025, but generated only $5.8 million in Q2 revenue. The rare-earth minerals company is betting its valuation on a $2.8 billion acquisition of Brazilian rare-earth specialist Serra Verde, which has secured $1.55 billion in Department of Defense backing.

Management projects the Serra Verde deal will deliver $550-650 million in EBITDA by end of 2027, scaling to $1.8 billion by 2030. The acquisition positions USAR to capitalize on U.S. supply-chain policy aimed at reducing dependence on China for critical minerals used in defense and technology applications.

The company trades at a significant premium to its cash position, pricing in future production that has yet to materialize. The DoD support signals government commitment to domestic rare-earth capacity, but execution risk remains high given the minimal current revenue base and the scale of the integration ahead.