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Nexa Resources SA (NEXA)
NYSE:NEXA
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Nexa Resources SA
(NYSE:NEXA)
56Neutral
Positive Factors
Financial Performance
Adjusted EBITDA of $183 million beat consensus estimates due to lower exploration and mining costs.
Growth Potential
The continued ramp-up of operations at Aripuana to its capacity of over 85ktpa zinc and 2.1Mozpa silver remains the strongest driver of growth in NEXA’s portfolio.
Operational Efficiency
Cash from operations of $112m came in above the VA consensus of $104.2m, and our estimate of $66.4m.
Negative Factors
Earnings Performance
Adjusted EPS missed consensus estimates due to higher financial and tax expenses.
Liquidity Concerns
Share liquidity is sufficiently low as to make it a challenging stock for institutional investors to own.
Technical Challenges
Technical challenges at Aripuanã continue to be a headwind.
Nexa Resources SA (NEXA) vs. S&P 500 (SPY)
Market Cap
$788.01M
Dividend YieldN/A
Average Volume (3M)21.38K
Price to Earnings (P/E)―
Beta (1Y)0.42
Revenue Growth6.28%
EPS Growth29.57%
CountryUS
Employees5,760
SectorBasic Materials
Sector Strength60
IndustryIndustrial Materials
Share Statistics
EPS (TTM)-1.54
Shares Outstanding132,438,610
10 Day Avg. Volume8,965
30 Day Avg. Volume21,378
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.29
Price to Cash Flow (P/CF)1.70
P/FCF Ratio3.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.39Price Target Upside7.39% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering7
Nexa Resources SA Business Overview & Revenue Model
Company DescriptionNexa Resources SA (NEXA) is a leading global mining company primarily engaged in the exploration, extraction, and processing of non-ferrous metals, including zinc, copper, and lead. With operations in Latin America, Nexa Resources operates several mining units and smelters in countries like Brazil and Peru. The company is committed to sustainable mining practices and aims to provide high-quality materials essential for various industries, contributing to the development of infrastructure and technology globally.
How the Company Makes MoneyNexa Resources SA generates revenue primarily through the sale of non-ferrous metals, particularly zinc, copper, and lead, extracted from its mining operations. The company owns and operates multiple mines and smelters, which allow it to produce and supply these metals to a broad range of industrial sectors, including construction, automotive, and electronics. Nexa's revenue streams are significantly influenced by global commodity prices, production volumes, and operational efficiency. Additionally, the company engages in strategic partnerships and joint ventures to enhance its production capabilities and market reach, thereby contributing to its earnings. Nexa also invests in exploration activities to identify and develop new mining sites, ensuring a sustainable supply of resources in the long term.
Nexa Resources SA Financial Statement Overview
Summary
Nexa Resources SA shows some positive trends in revenue growth and operational efficiency, as evidenced by improved margins and cash flow. However, persistent net losses, increased financial leverage, and a declining equity ratio present significant financial challenges. The company needs to focus on achieving consistent profitability and managing debt levels to enhance financial health and investor confidence.Income Statement
Nexa Resources SA has experienced volatile performance with revenue fluctuations over the years. The revenue grew by 7.52% from 2023 to 2024. Gross profit margin improved to 19.44% in 2024 from 11.52% in 2023, indicating better cost management. However, the company reported a net loss of $205 million in 2024, resulting in a negative net profit margin of -7.41%. EBIT and EBITDA margins have also shown improvement in 2024, reaching 9.99% and 21.99% respectively. Despite the improvements, consistent net losses highlight ongoing profitability challenges.45
Neutral
Balance Sheet
The company's debt-to-equity ratio increased to 2.28 in 2024 from 1.44 in 2023, indicating a higher leverage level. The equity ratio decreased to 17.55%, reflecting a reduced proportion of equity financing. Return on equity remains negative due to net losses, which is a concern for investors. The balance sheet shows a stable asset base but increasing liabilities, suggesting potential risk in financial stability.50
Neutral
Cash Flow
Nexa Resources SA's cash flow shows improvement, with free cash flow growing from a negative $66 million in 2023 to a positive $90 million in 2024. The operating cash flow to net income ratio is positive, reflecting cash generation capability despite net losses. The free cash flow to net income ratio has improved, indicating better cash efficiency. However, the capital expenditures remain a significant cash outflow, affecting overall cash flow stability.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.77B | 2.57B | 3.03B | 2.62B | 1.95B | Gross Profit |
| 538.07M | 296.48M | 638.81M | 656.07M | 387.00M | EBIT |
| 276.39M | -155.37M | 359.22M | 446.19M | 142.49M | EBITDA |
| 608.51M | 190.25M | 686.63M | 716.94M | -290.57M | Net Income Common Stockholders |
| -205.03M | -289.35M | 76.39M | 156.09M | -652.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 640.23M | 468.32M | 515.89M | 763.02M | 1.12B | Total Assets |
| 4.64B | 4.84B | 4.89B | 4.90B | 5.06B | Total Debt |
| 1.86B | 1.73B | 1.67B | 1.72B | 2.05B | Net Debt |
| 1.24B | 1.28B | 1.18B | 975.14M | 963.84M | Total Liabilities |
| 3.58B | 3.38B | 3.18B | 3.26B | 3.44B | Stockholders Equity |
| 813.93M | 1.20B | 1.44B | 1.39B | 1.38B |
| Cash Flow | Free Cash Flow | |||
| 90.71M | -66.39M | -120.43M | 7.78M | -31.99M | Operating Cash Flow |
| 349.72M | 246.85M | 266.63M | 492.99M | 291.70M | Investing Cash Flow |
| -237.61M | -270.35M | -378.93M | -469.27M | -369.20M | Financing Cash Flow |
| 61.94M | -25.28M | -149.23M | -344.13M | 451.62M |
Nexa Resources SA Technical Analysis
Negative
5.95
Price Trends
5.71
Positive
6.41
Negative
6.79
Negative
Market Momentum
0.05
Positive
50.53
Neutral
61.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEXA, the sentiment is Negative. The current price of 5.95 is below the 20-day moving average (MA) of 6.04, above the 50-day MA of 5.71, and below the 200-day MA of 6.79, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 50.53 is Neutral, neither overbought nor oversold. The STOCH value of 61.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEXA.
Nexa Resources SA Risk Analysis
Nexa Resources SA disclosed 49 risk factors in its most recent earnings report. Nexa Resources SA reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nexa Resources SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $698.93M | 134.41 | 0.67% | 1.42% | -0.37% | -94.30% | |
63 Neutral | $2.37B | 31.79 | 2.66% | 8.14% | 5.23% | ― | |
62 Neutral | $3.99B | ― | -5.41% | ― | -19.57% | -392.96% | |
56 Neutral | $788.01M | ― | -20.22% | ― | 6.28% | 29.57% | |
49 Neutral | $1.95B | -1.59 | -21.99% | 3.77% | 0.61% | -27.45% | |
48 Neutral | $519.63M | ― | -42.75% | 1.61% | -9.30% | -136.46% | |
44 Neutral | $1.09B | ― | -667.42% | ― | ― | -3.49% |
* Basic Materials Sector Average
Performance Comparison
NEXA
Nexa Resources SA
5.95
-1.36
-18.60%
CMP
Compass Minerals International
12.52
-0.82
-6.15%
GSM
Ferroglobe
3.72
-1.52
-29.01%
STR
Sitio Royalties
17.19
-5.36
-23.77%
MP
MP Materials
24.41
7.99
48.66%
TMC
TMC the metals company Inc.
3.05
1.42
87.12%
Nexa Resources SA Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -0.67% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted Nexa Resources' strong financial performance, including significant increases in EBITDA and cash flow. However, operational challenges, particularly at Aripuanã, and increased costs in the smelting segment were noted as key issues. The sentiment is balanced by strategic progress and strong market fundamentals for zinc.Highlights
Strong Financial Performance
Fourth quarter adjusted EBITDA reached $197 million, a 79% increase year-over-year, and full-year adjusted EBITDA totaled $714 million, marking the second highest in Nexa's history.
Improved Financial Position
Notable improvement in cash balance, reduction in gross debt, and a decrease in net leverage ratio from 2.2 to 1.7 times.
Positive Cash Flow Generation
Generated positive consolidated cash flow for the first time since initiating the investment cycle in Aripuanã.
Progress in Strategic Divestments
Successful execution of strategic divestments, including the sale of the Morro Agudo complex and other non-core assets, allowing focus on high-return assets.
Cerro Pasco Integration Project Approval
First phase officially approved, including the implementation of tailings pumping and piping systems, extending the life of the mining complex.
Zinc Market Support
LME zinc price increased by 22% year-over-year in Q4 2024, driven by constrained concentrate supply.
Lowlights
Zinc Production Decline
Q4 zinc production decreased by 19% year-over-year, primarily due to lower output at Cerro Lindo and the absence of contributions from Morro Agudo.
Operational Challenges at Aripuanã
Continued operational challenges with limited tailings filter capacity, delaying full production capacity to 2026.
Increased Smelting Costs
Consolidated smelting cost increased to $1.26 per pound in Q4 2024 from $1.00 per pound in the same period last year.
Higher Raw Material Costs
Increase in raw material costs due to higher zinc prices and lower treatment charges.
Company Guidance
During the fourth quarter and full year 2024 earnings call, Nexa Resources highlighted several key performance metrics and strategic advancements. The company achieved its second-highest adjusted EBITDA in history at $714 million for the year, a 76% increase from 2023, driven by higher by-product contributions, increased zinc prices, and foreign exchange gains. In the fourth quarter alone, adjusted EBITDA was $197 million, up 79% year-over-year. The net leverage ratio improved to 1.7 times from 2.2 times in Q3. Total consolidated net revenues for Q4 reached $741 million, an 18% increase year-over-year. Despite a 19% decrease in zinc production compared to Q4 2023, Nexa met its annual production guidance for zinc, lead, and silver, while copper production exceeded expectations. The cash cost per pound for mining dropped significantly to $0.00 from $0.44 in the previous year, mainly due to higher by-product contributions and lower operational costs. For 2025, Nexa anticipates continued revenue growth, supported by enhanced operational efficiencies and strategic divestments, including the sale of non-core assets. The company also announced the approval of the first phase of the Cerro Pasco integration project and highlighted its new dividend policy, aiming to return 20% of free cash flow to shareholders, with a minimum payment of eight cents per common share.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.