USA Rare Earth reported Q1 results on June 3, and the clearest shift since the pre-earnings note is in the lending market — availability has swung dramatically, short sellers have continued to cover, and the stock is holding its gains.
The borrow market tells a striking post-earnings story. Availability has jumped to 53.8% from around 15% just two days ago — roughly four times looser than the pre-earnings reading. For context, availability had been crushed to below 5% as recently as May 22, when the lending pool was almost completely exhausted. That extreme tightness has now released sharply. The shift suggests a meaningful wave of short covering around the earnings event, returning shares to the pool. Cost to borrow has also eased, dropping to 0.66% — down from above 1.2% in late April and the lowest level in the six-week window tracked here.
Short interest itself has continued the retreat described in the pre-earnings note. SI % of free float has fallen to 16.1%, down nearly 5% on the week and almost 13% over the past month. The directional drift is now a sustained trend rather than a one-session move. Bears who were sitting on roughly 26.9 million shares short in late April have pared back to around 21.4 million today. That said, 16% of free float is still a meaningful overhang — this is not a lightly shorted stock, and the ORTEX short score of 64.7 ranks in just the 2nd percentile of the universe on short score, flagging continued elevated bearish structural pressure. Options positioning has stayed relatively neutral throughout. The put/call ratio is 0.62, almost exactly in line with its 20-day average, and the z-score is near zero. There is no elevated hedging signal in either direction.
The Street has leaned constructively into the earnings event. Needham initiated coverage with a Buy rating and a $39 target on June 1 — just two days before the Q1 print. Earlier in May, Cantor Fitzgerald raised its target from $30 to $35, while Wedbush maintained its Outperform with a $35 target after the results. The consensus mean target is now $39.50, implying roughly 29% upside from current levels at $30.70. The bull case centres on USAR's unique position as the only scaled non-China producer of all four magnetic rare earths, backed by government funding and strategic partnerships. Bears point to sustained operating losses, negative cash flow, and heavy dependence on public funding to reach the mine-to-magnet thesis. The EV/EBITDA multiple is deeply stretched — running above 112x — reflecting a market pricing in future execution rather than current earnings power.
Institutional flows show active managers building positions. BlackRock added 7.7 million shares in the period to April 30, and State Street added 7 million in the same window. Alyeska trimmed 3.6 million shares by May 11, running counter to the broader institutional direction. The largest single holder, Mordechai Gutnick, added 1.9 million shares as recently as May 15. On the insider side, the CFO sold $763K of stock on May 21 shortly after receiving an equity award — a routine but worth-noting combination in the context of a stock that has run 17% over the past month.
Earnings history is thin but consistent in its message: the two prior events produced negative next-day moves of 4.1% and 2.8%, with five-day drawdowns of 4.4% and 11.7% respectively. Whether the June 3 print follows that pattern, or whether the heavy short-covering ahead of results has reset the setup, is the key question the tape will answer over the next several sessions. The next scheduled earnings event is August 11 — what to watch in the interim is whether availability remains loose and short interest continues to bleed lower, or whether the lending pool tightens again as new shorts rebuild positions into the post-earnings price.
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