USAR Stock Faces $20, TMC Faces $5 as Long-Term Profitability Risks Softens Investors
Shares of USA Rare Earth and TMC the metals company fell sharply after recent earnings reports reminded investors that both companies still face long paths toward profitability despite strong long-term resource ambitions.
Quick overview
- Shares of USA Rare Earth and TMC the Metals Company fell sharply after earnings reports highlighted their long paths to profitability.
- USA Rare Earth saw a 14% decline in its stock price, despite exceeding quarterly revenue expectations, with profitability not expected until 2028.
- TMC reported a net loss of $20.6 million and continues to face challenges as a pre-revenue deep-sea mining company.
- Both companies are under pressure as investors remain cautious about speculative ventures reliant on future commercialization.
Shares of USA Rare Earth and TMC the metals company fell sharply after recent earnings reports reminded investors that both companies still face long paths toward profitability despite strong long-term resource ambitions.
Profit-Taking Accelerates After Strong Rally
Shares of USA Rare Earth extended their decline last week, falling another 14% during Monday trading as investors reacted cautiously to the company’s first-quarter financial results. The stock has now slipped toward the critical $20 level after a powerful rally earlier this year.
Although the company’s quarterly figures exceeded Wall Street expectations, the report also reinforced concerns that profitability remains years away. Analysts surveyed by S&P Global Market Intelligence do not expect USA Rare Earth to generate profits until 2028, while positive cash flow is not projected before 2029.
That lengthy timeline is beginning to test investor patience, particularly after the stock’s earlier surge already priced in much of the recent optimism surrounding the rare-earth sector.
Strong Headlines Previously Fueled the Rally
Much of USAR’s earlier momentum was driven by two major announcements that significantly improved sentiment around the company’s long-term strategy.
The company first revealed it had secured access to rare-earth raw materials sourced outside China, an important development as Western countries increasingly seek alternatives to Chinese supply chains.
Shortly afterward, USA Rare Earth announced a $2.8 billion agreement to acquire Serra Verde Group, a Brazilian mining and processing company focused on rare-earth production.
USAR Chart Daily – Heading to the Lows Again 
Those developments helped position the company as a potential strategic beneficiary of growing geopolitical efforts to diversify global critical mineral supplies. However, with those catalysts already reflected in the share price, the earnings report became an opportunity for investors to lock in gains rather than increase exposure.
USAR Q1 2026 Financial Highlights
- Earnings Per Share (EPS): Normalized (-$0.12) per share (GAAP EPS was (-$0.34).
- Revenue: ($5.70) million, comfortably beating the Street’s estimate of ($4.23) million.
- Key Milestones: The company successfully executed a ($1.5) billion PIPE financing and announced the consolidation of the Round Top project.
TMC Also Remains Under Pressure
Selling pressure also continued across shares of TMC the Metals Company, which dropped back toward the $5 level after its own quarterly earnings release.
TMC reported a first-quarter loss of $0.05 per share, matching analyst expectations. As a pre-revenue deep-sea mining company, it generated no revenue during the quarter while posting a net loss of $20.6 million.
TMC Stock Weekly – Failing at the 50 SMA
The company continues pursuing long-term opportunities tied to deep-sea mineral extraction, particularly for metals used in battery technologies and energy infrastructure. However, investors remain cautious about the enormous regulatory, environmental, and financing challenges surrounding the industry.
TMC Q1 2026 Financial Highlights
-
- Net Loss: (-$20.5) to (-$20.6) million (flat compared to Q1 2025).
- Free Cash Flow: Improved to (-$0.6) million, up from (-$9.4) million in the prior-year period.
- Liquidity: Ended the quarter with ($119.7) million in cash and total available liquidity of ($164) million, including an undrawn credit facility.
- Management forecasts continued negative EPS as the company remains in the pre-revenue exploration and evaluation phase while awaiting commercial approval for deep-sea nodule harvesting.
- The company’s next earnings report is slated for August 13, 2026.
Long-Term Themes Remain Attractive but Risks Are Elevated
Both USA Rare Earth and TMC continue benefiting from broader investor interest in critical minerals, energy security, and supply-chain diversification.
Still, the latest pullback highlights growing market caution toward speculative companies that remain heavily dependent on future commercialization rather than current earnings.
While long-term demand for rare earths and battery metals may continue growing, volatility is likely to remain elevated as investors weigh geopolitical opportunities against execution risks, financing needs, and the lengthy timelines required to achieve sustainable profitability.
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