USA Rare Earth walks into its first full earnings report with a meaningful short base still in place — and a Street that is growing more constructive by the week.
Short sellers have been quietly covering. Short interest has dropped 40% over the past month, from roughly 37 million shares in early April to 22.3 million now — equal to 16.8% of the free float. That is still a significant short position. But the direction of travel is clear: bears have been reducing exposure as the stock has rallied 57% over the past month to $25.42. Availability in the lending market remains tight, with utilization near 95% — close to, but off the 100% peak hit in late April, when every share in the lending pool was lent out simultaneously. Cost to borrow has eased to under 1%, less than half its early-April rate, suggesting the squeeze pressure that briefly gripped lenders has subsided without triggering a full unwind.
Options positioning has turned slightly more defensive into the print. The put/call ratio moved up to 0.57, running above its 20-day average of 0.51 — a modest shift, not an alarm, but consistent with traders adding incremental downside protection ahead of a first-ever earnings release from a company that only recently listed.
The analyst community is unambiguously bullish. Wedbush lifted its target from $29 to $35 just two days ago, maintaining an Outperform rating, and Canaccord Genuity raised its target to $32 in late April after first reducing it in March. The mean target across the Street now sits near $36.57, roughly 44% above the current price — a gap that reflects genuine optimism about USAR's mine-to-magnet vertical integration story and strong government tailwinds for domestic rare earth supply. The bull case rests on USAR's unique positioning as a fully domestic, vertically integrated rare earth supplier, with gravity-based mining that may deliver meaningful cost advantages over conventional extraction. Bears point to steep execution risks — an inexperienced workforce, thin availability of qualified rare earth mining talent in the US, and a valuation that the Benzinga bear case pegs at roughly 39x EV/EBITDA, well above industry norms, with little margin for operational stumbles.
Institutional demand has been substantial. BlackRock added more than 6.4 million shares, bringing its stake to nearly 5.9% of the company. State Street added 5.6 million shares. Vanguard built a new position of 5.1 million shares. That concentration of passive and active flows into a thinly traded rare earth name amplifies both the opportunity and the fragility of the current price structure.
The one prior event with a price reaction on record — an April 9 announcement — saw the stock fall 3.8% on the day before recovering 9.8% over the following week. The earnings print today is less a test of quarterly numbers — the company is pre-revenue at scale — and more a referendum on whether management's timeline, cost guidance, and government funding updates justify a stock that has more than doubled in a month.
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USA Rare Earth, Inc. enters its maiden public-company earnings event on May 13 with a striking short-squeeze dynamic already playing out in the background — short sellers have covered aggressively even as the stock…
