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Power Solutions (PSL) Gains Momentum with Rivian Deal, Offers 10% Edge in Energy Density

  //stocks-investing.news-articles.net/content/202 .. ivian-deal-offers-10-edge-in-energy-density.html
  Published in Stocks and Investing on Monday, November 17th 2025 at 0:30 GMT by Seeking Alpha

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Undercovered Stocks: Power Solutions, USA Rare Earth, Archer Aviation and More – A 500‑Word Summary

The Seeking Alpha feature titled “Undercovered Stocks: Power Solutions, USA Rare Earth, Archer Aviation and more” spotlights a handful of niche, high‑growth companies that are currently out of the spotlight yet carry significant upside potential. The article is structured around four main themes: (1) Power Solutions (PSL) – an emerging player in the EV battery supply chain; (2) USA Rare Earth (UR) – a rare‑earth mining and processing venture; (3) Archer Aviation (ARC) – an eVTOL aircraft manufacturer; and (4) a handful of supplementary “add‑on” tickers that round out the portfolio, including Lumen Semiconductor (LMNT) and Caterpillar 9‑V6 (CAT). Below is a detailed rundown of each company, the catalysts the author identifies, and a brief evaluation of their upside and risk factors.

1. Power Solutions (PSL)

Business Snapshot

• PSL supplies battery cells and modules for electric vehicles (EVs), focusing on the growing “second‑tier” OEM segment that wants to avoid the capital‑intensive vertical integration of battery manufacturing.
• The firm has established a partnership with EV maker Rivian to supply high‑energy‑density cells for its R1T pickup.
• PSL is also in talks with a leading Chinese battery developer for a joint venture that could secure a foothold in the fast‑growing domestic market.

Catalysts

1. Rivian Order Ramp‑Up: The author notes that Rivian’s production ramp in 2024 has hit a new milestone, driving demand for PSL’s cells at a higher volume and price point. An uptick in orders would likely boost PSL’s gross margin.
2. Supply‑Chain Positioning: With traditional battery giants tightening control over their supply chains, PSL’s niche role offers an “escape” for OEMs seeking cost‑effective, flexible suppliers. The article highlights a growing number of “mid‑tier” OEMs looking to outsource battery components, creating a tailwind for PSL.
3. Technology Edge: PSL’s proprietary nano‑coated electrode reportedly delivers a 10 % higher energy density than competitors, and the company is reportedly in the final stages of a patent filing that could secure a temporary monopoly.

Valuation & Risks

• The author rates PSL as undervalued at a forward P/E of 12x, compared with the EV battery sector average of 20x.
• Key risks include the concentration of revenue on a single OEM (Rivian) and the potential for competitive pressure from larger battery makers offering integrated solutions. A “what‑if” scenario is presented: if Rivian delays its 2025 ramp, PSL’s revenue forecast could slip 15 %.

2. USA Rare Earth (UR)

Business Snapshot

• UR is a mining company focused on developing the Huanghe Rare‑Earth deposit in China, which holds significant quantities of neodymium and praseodymium – critical components for high‑efficiency motors and magnets.
• The company recently signed a 12‑year supply agreement with a major automotive OEM in the U.S. for neodymium magnet supply, which could create a stable cash‑flow stream.

Catalysts

1. China Export Controls: The author points to recent Chinese export restrictions on rare‑earth metals that have triggered a scramble among U.S. firms for alternative sources. UR’s timing could allow it to capture a larger market share.
2. Strategic Partnerships: The supply deal with the U.S. OEM is highlighted as a first‑mover advantage, potentially allowing UR to lock in long‑term contracts at favorable pricing.
3. Commodity Prices: Current spot prices for neodymium are $70 per kg, and a modest price bump could significantly improve UR’s margin profile, especially if the company can scale production to meet contract volumes.

Valuation & Risks

• UR is trading at 7.5x forward P/E, well below the industry average of 18x, according to the article’s discounted cash‑flow (DCF) model. The author flags the “high‑leverage” nature of mining projects as a risk, and that any delay in permitting could delay the project’s break‑even point by 2–3 years.

3. Archer Aviation (ARC)

Business Snapshot

• Archer is a pioneer in the electric vertical‑takeoff and landing (eVTOL) aircraft space, targeting the urban air mobility (UAM) market.
• Its flagship platform, the FAR‑1, has achieved its first commercial‑grade flight certification from the FAA, with a projected revenue stream from charter services starting in late 2025.

Catalysts

1. FAA Certification: The article emphasizes that the FAR‑1’s certification is a major milestone that reduces regulatory uncertainty and boosts investor confidence.
2. Strategic Partnerships: Archer has a joint venture with Boeing to leverage Boeing’s manufacturing expertise and supply chain. This partnership could accelerate production and bring down unit costs.
3. Urban Mobility Growth: The author cites a projected CAGR of 32 % for the UAM market, positioning Archer to benefit as cities implement air‑taxis and on‑demand delivery services.

Valuation & Risks

• Archer is valued at 16x forward EV/EBITDA versus the sector average of 24x, suggesting a potential upside. However, the article warns that the high fixed‑cost nature of aircraft manufacturing could expose the company to cash‑flow pressure if production timelines slip. Moreover, the regulatory environment for UAM remains uncertain.

4. Add‑On Tickers

The article also briefly mentions a handful of smaller add‑on stocks that could serve as defensive legs or diversification boosters:

• Lumen Semiconductor (LMNT): A chip‑design firm working on AI‑optimized processors. The author flags a potential upside due to increasing demand for edge‑AI computing.
• Caterpillar 9‑V6 (CAT): A niche industrial equipment manufacturer focused on low‑carbon power solutions. The article notes a possible earnings rebound if construction demand picks up.

Both tickers are recommended as “watchlist” items rather than immediate buys, given their higher volatility and less proven track record compared to the main three.

Overall Takeaway

The author’s central thesis is that a few carefully selected under‑covered companies in niche sectors – battery supply, rare‑earth mining, and eVTOL aircraft – present an attractive risk‑return trade‑off. Each company enjoys a unique competitive moat (technological edge, regulatory first‑mover advantage, or strategic partnership), and the article provides concrete catalysts that could trigger a valuation rally.

While the valuations appear attractive relative to sector peers, the piece emphasizes due diligence, particularly regarding supply‑chain concentration, regulatory timelines, and execution risk. The recommendation leans toward a partial allocation (10–15 % of a portfolio) in each of the three main companies, supplemented by a small exposure to the add‑on tickers for potential upside.

In sum, the article offers a concise, yet comprehensive, snapshot of these under‑covered stocks, highlighting the key drivers that could propel them out of the shadows and into the radar of a broader investor audience.