Ero Copper (ERO) AI Stock Analysis

• Market Cap: $2.21B
• Dividend Yield: N/A
• Average Volume (3M): 303.35K
• Price to Earnings (P/E): 75.3
• Beta (1Y): 1.41
• Revenue Growth: 16.82%
• EPS Growth: -67.73%
• Country: CA
• Employees: 3,690
• Sector: Basic Materials
• Sector Strength: 65
• Industry: Copper
• EPS (TTM): 0.48
• Shares Outstanding: 103,572,070
• 10 Day Avg. Volume: 330,813
• 30 Day Avg. Volume: 303,353
• PEG Ratio: >-0.01
• Price to Book (P/B): 8.34
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 76.66
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 0.97
• Enterprise Value/Gross Profit: 8.89
• Enterprise Value/Ebitda: 3.42
• 1Y Price Target: $25.06
• Price Target Upside: 15.66% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

• Rating: 64 Neutral
• Price Target: C$23.50 ▲(8.44%Upside)

Ero Copper's overall stock score reflects a mixture of moderate financial performance, strong technical momentum, and high valuation concerns. Key strengths include robust operational efficiency and strategic progress, while challenges in profitability, cash flow, and production pose risks. Positive earnings call sentiment and shareholder support provide additional confidence in the company's direction.

Positive Factors

Financial Performance

Adjusted EBITDA of $63M beat our estimate of $27M and consensus of $57M.

Growth Potential

ERO offers exposure to copper growth and deleveraging at a discount, with exploration upside and productivity improvement expected.

Investment Opportunity

The stock is trading at a P/NAV of 0.76x, below its historical multiple, indicating a potential buying opportunity.

Negative Factors

Guidance Reduction

The company updated its 2025 copper production guidance to 75-85Kt, below the previous 95-105Kt, due to expected ramp-up of Tucumã.

Operational Challenges

2024 production results were below previous guidance, primarily due to Tucumã's ramp-up challenges, including power disruptions and tailings filtration circuit issues.

Recent Underperformance

Operational challenges and guidance reduction have led to recent underperformance for Ero Copper.

Ero Copper Business Overview & Revenue Model

Company Description

Ero Copper Corp is a mining company focused on the production and exploration of copper. Headquartered in Vancouver, Canada, Ero Copper primarily operates in Brazil through its 99.6% ownership of Mineração Caraíba S.A., a company that has been engaged in mining activities since 1979. The company's operations include the MCSA Mining Complex in Bahia, which consists of fully integrated mining and processing facilities, as well as the Boa Esperança project in Pará, which is under development.

How the Company Makes Money

Ero Copper makes money through the extraction, processing, and sale of copper ore. The company's revenue is primarily generated from the sale of copper concentrate, which is sold under long-term contracts to various smelters and traders around the world. In addition to copper, Ero Copper also produces and sells gold and silver by-products, which contribute to its revenue streams. The company's earnings are influenced by factors such as global copper prices, production efficiency, and the successful expansion and development of its mining projects in Brazil.

Ero Copper Financial Statement Overview

Summary

Ero Copper's financial performance is moderate with strong operational efficiency but challenges in profitability and cash flow. Despite a healthy gross profit margin and EBIT margin, the low net profit margin and negative free cash flow pose risks to long-term sustainability.

Income Statement

Ero Copper shows a mixed performance in profitability and growth. The TTM gross profit margin is healthy at 41.85%, and EBIT margin is robust at 31.20%. However, the net profit margin is relatively low at 3.86%, indicating challenges in achieving profitability despite strong operational efficiency. Revenue growth from the previous year is 4.10%, reflecting moderate growth in a competitive market.

Balance Sheet

The balance sheet reveals a moderate financial position. The debt-to-equity ratio is 0.93, indicating a balanced use of debt, but the equity ratio of 42.36% suggests a stable reliance on equity financing. Return on equity is low at 2.65%, pointing to inefficient use of equity to generate profits.

Cash Flow

Cash flow analysis shows challenges in liquidity management. The operating cash flow to net income ratio is strong at 10.25, indicating good cash generative capability relative to profits. However, free cash flow is negative, which could constrain future investments and growth opportunities.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
489.55M	470.26M	427.48M	426.39M	489.92M	324.08M
	Gross Profit
204.90M	180.55M	156.84M	187.18M	318.86M	188.14M
	EBIT
152.78M	118.63M	92.50M	126.70M	264.01M	154.10M
	EBITDA
173.30M	13.78M	208.15M	185.67M	311.30M	193.45M
	Net Income Common Stockholders
18.89M	-68.47M	92.80M	101.83M	201.05M	51.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
44.34M	50.40M	111.74M	317.40M	130.13M	62.51M
	Total Assets
409.64M	1.46B	1.51B	1.19B	689.76M	497.10M
	Total Debt
188.61M	620.07M	445.84M	429.02M	66.36M	169.85M
	Net Debt
144.27M	569.67M	334.10M	251.32M	-63.77M	107.34M
	Total Liabilities
311.41M	866.95M	702.36M	645.91M	294.27M	283.02M
	Stockholders Equity
97.85M	587.13M	804.25M	538.59M	393.06M	212.70M
Cash Flow		Free Cash Flow
-95.71M	-192.17M	-297.55M	-152.43M	182.76M	45.03M
	Operating Cash Flow
193.63M	145.42M	163.10M	143.39M	364.59M	162.84M
	Investing Cash Flow
-287.35M	-335.38M	-308.17M	-425.81M	-179.53M	-116.56M
	Financing Cash Flow
124.08M	131.16M	77.75M	327.30M	-115.43M	288.00K

Ero Copper Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 21.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ERO, the sentiment is Positive. The current price of 21.67 is above the 20-day moving average (MA) of 19.90, above the 50-day MA of 17.87, and above the 200-day MA of 21.41, indicating a neutral trend. The MACD of 0.95 indicates Negative momentum. The RSI at 66.92 is Neutral, neither overbought nor oversold. The STOCH value of 72.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ERO.

Ero Copper Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LUN	75 Outperform	$12.38B	25.63	2.66%	2.47%	-8.36%	-200.42%
HBM	71 Outperform	$5.19B	23.84	6.50%	0.15%	10.69%	79.56%
FM	67 Neutral	$17.85B	93.90	1.22%	―	-13.79%	―
ERO	64 Neutral	$2.21B	75.33	2.54%	―	16.82%	-67.73%
CS	64 Neutral	$5.92B	53.80	2.71%	―	37.30%	―
TKO	62 Neutral	$1.29B	11.15	-12.40%	―	7.36%	-159.52%
Sector *	51 Neutral	$2.04B	-1.15	-21.37%	3.64%	2.88%	-30.57%

Ero Copper Corporate Events

Ero Copper Corp Announces AGM Voting Results, Reaffirms Governance

Ero Copper Corp announced the results of its Annual General Meeting of Shareholders, where 85.44% of its common shares were represented. Shareholders approved all items, including the re-election of ten directors, the appointment of KPMG LLP as auditors, and an advisory vote on executive compensation. These approvals reflect strong shareholder support and are likely to positively impact the company’s governance and strategic direction.

Ero Copper to Announce Q1 2025 Results on May 5

Ero Copper Corp. has announced that it will release its first quarter 2025 operating and financial results on May 5, 2025, after market close. The company will hold a conference call on May 6, 2025, to discuss the results, providing stakeholders with insights into its performance and strategic direction. This announcement is crucial for investors and market analysts as it will shed light on the company’s operational efficiency and financial health, impacting its market positioning.