Capstone Copper (CS) AI Stock Analysis

• Market Cap: $4.36B
• Dividend Yield: N/A
• Average Volume (3M): 2.99M
• Price to Earnings (P/E): 37.9
• Beta (1Y): 2.58
• Revenue Growth: 20.74%
• EPS Growth: N/A
• Country: CA
• Employees: 3,008
• Sector: Basic Materials
• Sector Strength: 59
• Industry: Copper
• EPS (TTM): 0.15
• Shares Outstanding: 761,902,300
• 10 Day Avg. Volume: 3,207,043
• 30 Day Avg. Volume: 2,992,743
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.80
• Price to Cash Flow (P/CF): 6.70
• P/FCF Ratio: 20.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$10.84
• Price Target Upside: 89.53% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Capstone Copper's overall stock score reflects strong financial performance with significant revenue growth and operational efficiency. The positive outlook from the earnings call, highlighted by record production and deleveraging, contributes favorably. However, the stock's high valuation and bearish technical indicators, coupled with challenges in profitability and free cash flow, moderate the overall score.

Positive Factors

Financial flexibility

Capstone's financial flexibility and diversified asset base will allow the company to pursue value accretive opportunities, supporting production growth and lowering costs.

Operational leverage

In a rising copper price environment, CS is expected to perform well due to elevated operational leverage.

Negative Factors

Cash cost challenges

A significant cash cost decline is unlikely before Santo Domingo comes online, placing Capstone at the high end of the cash cost curve.

Execution risks

There are execution risks on a series of debottlenecking projects and uncertainties around funding for the Santo Domingo project.

Capstone Copper Business Overview & Revenue Model

Company Description

Capstone Copper (CS) is a Canadian-based mining company primarily engaged in the exploration, development, and production of copper. Operating in the natural resources sector, the company focuses on producing high-grade copper concentrates from its mines located in mining-friendly jurisdictions. Capstone Copper is committed to sustainable practices and aims to create long-term value through operational excellence, strategic acquisitions, and innovative growth strategies.

How the Company Makes Money

Capstone Copper generates revenue primarily through the sale of copper concentrates produced from its mining operations. The company extracts and processes copper ore from its mines, which is then sold to smelters and other industrial customers who use copper in various applications, such as electrical wiring, construction, and manufacturing. Key revenue streams include long-term supply contracts with major industrial customers and spot market sales. The company's earnings are influenced by factors such as copper market prices, production costs, and operational efficiencies. Capstone Copper may also engage in strategic partnerships and joint ventures to enhance its production capacity and explore new growth opportunities.

Capstone Copper Financial Statement Overview

Summary

Capstone Copper's financial performance faces significant challenges with a decline in profitability, increased debt levels, and negative free cash flow. Although the balance sheet remains robust, operational inefficiencies and high capital expenditures strain the company's financial stability.

Income Statement

Capstone Copper's income statement shows a decline in profitability, with a negative net income in the most recent year. The gross profit margin decreased significantly over the past year. While revenue growth is stagnant, the EBIT and EBITDA margins have contracted, reflecting operational challenges in the mining industry.

Balance Sheet

The balance sheet indicates a solid equity base, but the debt-to-equity ratio has increased, suggesting higher leverage. The return on equity has turned negative due to recent losses, which poses a risk. However, the equity ratio remains stable, providing some financial cushion.

Cash Flow

Cash flow analysis reveals negative free cash flow due to high capital expenditures. The operating cash flow to net income ratio is unfavorable due to the net loss, indicating cash flow management challenges. Despite past positive cash flow trends, recent performance shows significant strain.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
1.41B	1.35B	1.30B	794.77M	453.76M	418.66M
	Gross Profit
262.50M	83.02M	207.80M	360.44M	82.18M	42.43M
	EBIT
55.01M	32.93M	140.22M	262.18M	37.31M	14.19M
	EBITDA
270.61M	175.48M	303.51M	442.74M	119.86M	94.99M
	Net Income Common Stockholders
-20.65M	-101.67M	122.20M	226.83M	12.56M	10.86M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
65.99M	126.82M	171.86M	264.35M	60.01M	44.49M
	Total Assets
1.34B	5.87B	5.38B	1.73B	1.39B	1.33B
	Total Debt
216.97M	1.16B	702.97M	16.04M	193.13M	213.03M
	Net Debt
186.90M	1.03B	532.66M	-246.05M	136.55M	173.09M
	Total Liabilities
483.77M	2.81B	2.20B	711.53M	502.42M	459.99M
	Stockholders Equity
741.91M	2.66B	2.75B	1.02B	779.06M	761.10M
Cash Flow		Free Cash Flow
-299.03M	-499.91M	-472.33M	419.92M	49.65M	-3.86M
	Operating Cash Flow
262.39M	116.82M	87.42M	553.35M	147.17M	92.88M
	Investing Cash Flow
-591.21M	-673.28M	-370.74M	-143.69M	-96.37M	-65.49M
	Financing Cash Flow
348.43M	508.47M	192.14M	-204.28M	-34.13M	-21.65M

Capstone Copper Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CS, the sentiment is Negative. The current price of 5.72 is below the 20-day moving average (MA) of 7.88, below the 50-day MA of 8.14, and below the 200-day MA of 9.16, indicating a bearish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 38.18 is Neutral, neither overbought nor oversold. The STOCH value of 9.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CS.

Capstone Copper Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HBM	66 Neutral	$3.53B	32.02	3.30%	0.23%	19.70%	9.24%
LUN	64 Neutral	C$8.24B	25.63	0.24%	3.88%	-2.71%	-188.94%
FM	63 Neutral	C$13.35B	―	0.02%	―	-24.38%	99.06%
CS	60 Neutral	$4.36B	37.88	2.90%	―	20.74%	―
TECK.B	59 Neutral	$21.42B	67.66	1.26%	1.20%	-10.03%	-86.30%
Sector *	47 Neutral	$2.36B	-3.00	-21.73%	3.58%	3.97%	-28.71%
IVN	46 Neutral	$13.89B	43.93	5.25%	―	―	-33.54%

Capstone Copper Corporate Events

Capstone Copper Upsizes Senior Notes Offering to $600 Million

Capstone Copper Corp. announced the successful pricing and upsizing of its senior notes offering to $600 million, up from the initially planned $500 million. The proceeds will be used to repay project financing debt at its Mantoverde subsidiary, reduce debt on its senior secured revolving credit facility, and for general corporate purposes. This move is part of Capstone’s strategy to optimize its financial structure and support its growth initiatives in the copper mining sector.

Capstone Copper Launches $500 Million Senior Notes Offering

Capstone Copper Corp. announced a $500 million offering of senior notes due 2033 to refinance debt and support corporate purposes. This move aims to strengthen the company’s financial position by repaying project financing debt and reducing its revolving credit facility, potentially enhancing its operational flexibility and market competitiveness.

Capstone Copper Achieves Record Production and Plans Future Growth

Capstone Copper Corp. reported record copper production and earnings for Q4 2024, marking significant growth and transformation in its operations. The company announced plans for future growth, including the development of the Mantoverde Optimized project, further balance sheet strengthening, and continued operational efficiency, all of which are expected to boost cash flow and reduce costs, benefiting stakeholders.

Capstone Copper Projects Significant Growth in 2025 Amid Record Production in 2024

Capstone Copper Corp. announced record consolidated copper production in 2024, totaling 184,458 tonnes, due to the ramp-up of the Mantoverde Development Project. Despite falling slightly short of its production guidance, the company forecasts significant growth for 2025 with a projection of 220,000 to 255,000 tonnes, alongside decreased cash costs, which are expected to enhance cash flow generation and operational efficiency.

Capstone Copper Welcomes Rick Coleman to Board of Directors

Capstone Copper has appointed Rick Coleman to its Board of Directors, effective January 15, 2025. Coleman brings over 45 years of experience in mining operations and development, having recently retired from Freeport-McMoRan Inc. His expertise is expected to contribute significantly to Capstone’s ongoing operational success and strategic growth in the copper mining industry.