USA Rare Earth (USAR) has had quite a ride lately. Its stock has jumped nearly 79% over the past month and gained almost 90% in the past 3 months. Investors appear curious about what is fueling this momentum.

See our latest analysis for USA Rare Earth.

While USAR’s share price has soared with a 1-year total shareholder return of 157%, the past week has seen a pullback as momentum cools from its recent rocket-like run. Still, with annual performance this strong, investors are clearly pricing in plenty of growth potential, or at least a meaningful shift in sentiment after recent news.

If this kind of sudden momentum has you wondering about what else is trending, it might be time to broaden your radar and discover fast growing stocks with high insider ownership

But with analyst targets sitting far below the current price and stellar returns already on the books, is USA Rare Earth trading at a bargain, or is the market already anticipating even bigger things to come?

According to the SWS DCF model, USA Rare Earth’s estimated fair value is $80.59, while the stock last closed at $27.73. This creates a striking gap that suggests a substantial undervaluation.

The DCF model projects the company’s expected future cash flows and discounts them back to present-day values, providing a theoretically grounded price for the business. In the case of USAR, this is especially relevant, as the company is not currently profitable and traditional earnings multiples do not apply.

This big disconnect hints at a business in early high-growth stages. Rapid revenue and earnings growth expectations amplify the model’s result, but also reflect the uncertainty and volatility typical of such companies, particularly those with unproven profitability and negative equity.

Look into how the SWS DCF model arrives at its fair value.

Result: DCF Fair value of $80.59 (UNDERVALUED)

However, rapid growth forecasts are unproven. Negative earnings may cause investors to reassess, especially if market sentiment turns or fundamentals do not improve.

Find out about the key risks to this USA Rare Earth narrative.

Shares of Sunrise Bio surged on Tuesday after the company reported favorable trial results for its new cancer treatment. The phase 3 study showed improved survival rates in patients receiving the therapy, compared to those on standard treatment. Company executives stated that these findings support plans to seek regulatory approval. Investors responded positively to the news, with trading volume in Sunrise Bio more than doubling its recent average. Analysts noted that a successful approval process could potentially position the company as a leader in oncology therapies. Sunrise Bio plans to present the full trial data at an upcoming medical conference. The company indicated that it will be engaging with regulatory agencies in the coming months to discuss next steps.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out USA Rare Earth for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you have a different perspective or want to dig into the numbers yourself, you can craft your own narrative in just minutes. So why not Do it your way?

A great starting point for your USA Rare Earth research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

Maximize your investment strategy by checking out hand-picked opportunities shaping the next big growth trends. Now is the time to target exciting possibilities before others catch on.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include USAR.

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