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Nexa Resources SA (NEXA)
NYSE:NEXA
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Nexa Resources SA
(NYSE:NEXA)
Rating:56Neutral
Price Target:
$5.00
▲(1.42%Upside)
Positive Factors
Deleveraging Efforts
At maturity, Aripuana will generate mine-level free cash flow of over $100 million per year, which should allow NEXA to deleverage and continue to invest in new exploration and growth projects.
Growth Potential
The continued ramp-up of operations at Aripuana to its capacity remains the strongest driver of growth in NEXA’s portfolio.
Strategic Acquisition
Nexa's potential acquisition of BHP's copper/gold assets in Brazil would align with its strategy to increase exposure to copper.
Negative Factors
Financial Performance
Significant free cash flow miss with cash burn of $226M, well below estimates and consensus.
Market Challenges
Challenges include tight zinc smelting margins, low share liquidity, and low growth.
Operational Challenges
NEXA had a slight operational miss versus estimates, with production down 8% on weather challenges, and unit cash costs slightly higher than expected on lower by-product sales.
Nexa Resources SA (NEXA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$652.92M
Dividend Yield2.05%
Average Volume (3M)25.19K
Price to Earnings (P/E)―
Beta (1Y)0.41
Revenue Growth12.30%
EPS Growth42.72%
CountryUS
Employees5,760
SectorBasic Materials
Sector Strength66
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.13
Shares Outstanding132,438,610
10 Day Avg. Volume25,540
30 Day Avg. Volume25,190
Financial Highlights & Ratios
PEG Ratio-0.21
Price to Book (P/B)0.55
Price to Sales (P/S)0.00
P/FCF Ratio-6.63
Enterprise Value/Market Cap3.02
Enterprise Value/Revenue0.18
Enterprise Value/Gross Profit3.60
Enterprise Value/Ebitda1.21
Forecast
1Y Price Target
$6.13Price Target Upside24.34% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering6
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 Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -13.36%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Negative
Nexa Resources reported significant challenges in production due to environmental factors and operational issues, leading to decreased production volumes and increased leverage. Despite these challenges, the company highlighted progress in strategic projects and benefits from increased metal prices. However, the overall sentiment was weighed down by the operational and financial challenges faced during the quarter.Q1-2025 Updates
Positive Updates
Increase in Zinc Market Prices
The LME zinc price averaged $2,838 per ton, reflecting a 16% increase year-over-year.
Copper and Silver Price Improvements
LME copper price averaged $9,340 per ton, up 11% year-over-year, and the LME silver price averaged $32 per ounce, up 37% year-over-year.
Cerro Pasco Integration Project Progress
Phase 1 of the Cerro Pasco Integration project, including the tailings pumping and piping system, is progressing on schedule.
Adjusted EBITDA and Margin
Adjusted EBITDA reached $125 million, with a margin of 20% for the quarter.
Negative Updates
Operational Challenges and Production Declines
Zinc production in Q1 2025 was 67,000 tons, down 23% year-over-year due to heavy rainfall and operational issues.
Negative Working Capital Impact
Negative working capital impact of $265 million due to seasonal factors and taxes.
Increased Leverage
Net debt-to-adjusted EBITDA ratio increased from 1.7x to 2.1x, primarily due to decreased cash balance and lower adjusted EBITDA.
Smelting Segment Challenges
Total smelting sales decreased by 6% year-over-year and the cash cost increased to $1.17 per pound.
Company Guidance
During Nexa Resources' Q1 2025 earnings call, the company outlined several key metrics and guidance for the upcoming quarters. Nexa reported an adjusted EBITDA of $125 million, with margins staying within historical ranges despite operational challenges at El Porvenir, Atacocha, and Aripuanã due to heavy rainfall, which led to production volumes slightly below initial estimates. The company's consolidated net revenues totaled $627 million, even with lower smelting sales volumes. The mining cash cost significantly dropped to $0.11 per pound compared to $0.26 per pound last year, driven by higher byproduct contributions and lower treatment charges. For the smelting segment, total sales reached 130,000 tons, a decrease of 6% year-over-year, with a consolidated smelting cash cost of $1.17 per pound, up from $0.98 in the same period last year. Nexa also highlighted a negative working capital impact of $265 million due to seasonal variations, which is expected to normalize over the coming quarters. The company reaffirmed its 2025 CapEx guidance at $347 million and emphasized its commitment to extending the life of its assets through ongoing projects like the Cerro Pasco Integration project.Nexa Resources SA Financial Statement Overview
Summary
Nexa Resources SA demonstrates operational efficiency with positive EBIT and EBITDA margins, yet faces significant profitability challenges, as shown by negative net profit and ROE. The high debt-to-equity ratio suggests financial risk, and cash flow management issues are evident, reflecting in the moderate financial performance score.Income Statement
Nexa Resources SA shows a mixed income statement performance. The gross profit margin for the TTM (Trailing-Twelve-Months) is approximately 19.63%, reflecting a reasonable ability to convert revenue into gross profit. However, the company struggles with profitability, as evidenced by a negative net profit margin of -6.02% due to substantial net losses. Revenue growth from the previous year is modest at 1.01%, indicating slight improvement. EBIT and EBITDA margins are positive at 12.93% and 19.64% respectively, suggesting efficient operations despite net losses.72
Positive
Balance Sheet
The balance sheet indicates a moderately leveraged position with a debt-to-equity ratio of 2.14, pointing to potential financial risk. The company's return on equity (ROE) is negative at -19.34%, aligning with the net losses, which could be concerning for investors. Nonetheless, the equity ratio stands at 18.61%, showing a reasonable proportion of equity financing in total assets.65
Positive
Cash Flow
Cash flow analysis reveals stability in operational cash flow, with an operating cash flow to net income ratio of -1.66, indicating the company generates cash despite net losses. Free cash flow has decreased compared to the previous period, reflecting a need for improved cash management. The free cash flow to net income ratio is -0.25, highlighting challenges in converting earnings to cash.68
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.79B | 2.77B | 2.57B | 3.03B | 2.62B | 1.95B | Gross Profit |
| 548.52M | 538.07M | 296.48M | 638.81M | 656.07M | 387.00M | EBIT |
| 361.27M | 276.39M | -155.37M | 359.22M | 446.19M | 142.49M | EBITDA |
| 548.69M | 608.51M | 190.25M | 686.63M | 716.94M | -290.57M | Net Income Common Stockholders |
| -168.10M | -205.03M | -289.35M | 76.39M | 156.09M | -652.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 401.21M | 640.23M | 468.32M | 515.89M | 763.02M | 1.12B | Total Assets |
| 4.67B | 4.64B | 4.84B | 4.89B | 4.90B | 5.06B | Total Debt |
| 1.86B | 1.86B | 1.73B | 1.67B | 1.72B | 2.05B | Net Debt |
| 1.47B | 1.24B | 1.28B | 1.18B | 975.14M | 963.84M | Total Liabilities |
| 3.56B | 3.58B | 3.38B | 3.18B | 3.26B | 3.44B | Stockholders Equity |
| 869.20M | 813.93M | 1.20B | 1.44B | 1.39B | 1.38B |
| Cash Flow | Free Cash Flow | ||||
| 41.47M | 90.71M | -66.39M | -120.43M | 7.78M | -31.99M | Operating Cash Flow |
| 279.01M | 349.72M | 246.85M | 266.63M | 492.99M | 291.70M | Investing Cash Flow |
| -212.88M | -237.61M | -270.35M | -378.93M | -469.27M | -369.20M | Financing Cash Flow |
| 19.14M | 61.94M | -25.28M | -149.23M | -344.13M | 451.62M |
Nexa Resources SA Technical Analysis
Negative
4.93
Price Trends
5.37
Negative
5.49
Negative
6.36
Negative
Market Momentum
-0.12
Negative
44.03
Neutral
46.44
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 4.93 is below the 20-day moving average (MA) of 4.96, below the 50-day MA of 5.37, and below the 200-day MA of 6.36, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 44.03 is Neutral, neither overbought nor oversold. The STOCH value of 46.44 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 (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.09B | 39.36 | 2.86% | 6.83% | 7.18% | ― | |
56 Neutral | $652.92M | ― | -16.64% | 2.05% | 12.30% | 42.72% | |
56 Neutral | $716.64M | 27.86 | -7.29% | 1.46% | -4.98% | -192.96% | |
54 Neutral | $800.78M | ― | -46.32% | 1.61% | 5.81% | -78.45% | |
54 Neutral | $4.99B | ― | -9.62% | ― | 4.63% | -3189.81% | |
51 Neutral | $2.03B | -1.27 | -21.09% | 3.98% | 2.91% | -30.50% | |
42 Neutral | $1.78B | ― | -667.42% | ― | ― | -3.49% |
* Basic Materials Sector Average
Performance Comparison
NEXA
Nexa Resources SA
4.93
-2.43
-33.02%
CMP
Compass Minerals International
19.24
8.05
71.94%
GSM
Ferroglobe
3.84
-1.45
-27.41%
STR
Sitio Royalties
20.49
-0.19
-0.92%
MP
MP Materials
30.55
17.22
129.18%
TMC
TMC the metals company Inc.
4.34
2.82
185.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.