Ero Copper (ERO) AI Stock Analysis

• Market Cap: C$4.42B
• Dividend Yield: N/A
• Average Volume (3M): 402.36K
• Price to Earnings (P/E): 22.3
• Beta (1Y): 2.00
• Revenue Growth: 29.97%
• EPS Growth: 658.38%
• Country: CA
• Employees: 3,690
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Copper
• EPS (TTM): 0.38
• Shares Outstanding: 103,890,250
• 10 Day Avg. Volume: 448,399
• 30 Day Avg. Volume: 402,364
• PEG Ratio: 0.12
• Price to Book (P/B): 2.37
• Price to Sales (P/S): 2.96
• P/FCF Ratio: -7.24
• 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$39.39
• Price Target Upside: -7.31% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 5.91
• Revenue Forecast (FY): C$1.64B

• Rating: 76 Outperform
• Price Target: C$48.00 ▲(12.94% Upside)

Ero Copper's overall score is driven by strong technical indicators and positive earnings call sentiment, highlighting operational and strategic improvements. Financial performance is solid, though cash flow challenges need addressing. Valuation is reasonable, and recent corporate developments add potential for future growth.

Positive Factors

High Profitability and Margins

Sustained gross and net margins above industry averages indicate durable operational efficiency and pricing power. High EBIT/EBITDA margins provide a structural cushion against commodity cycles, supporting reinvestment, debt reduction and funding of growth initiatives over the medium term.

Record Operational Performance

Consistent record throughput and production at Caraíba, Tucumã and Xavantina reflect scalable operations and execution improvements. Higher steady volumes can lower unit costs, improve unit cash margins and support more predictable free cash flow generation over the coming quarters.

Improving Leverage and Liquidity

Meaningful deleveraging and improved debt metrics enhance financial flexibility and reduce interest burden. Better leverage supports capacity to fund development projects and withstand commodity downturns, improving long-term solvency and strategic optionality for M&A or capex.

Negative Factors

Negative Free Cash Flow

Persistent negative free cash flow undermines the company’s ability to self-fund capex, exploration and debt paydown. Over months, weak cash conversion raises refinancing and liquidity risk, forcing reliance on external financing or asset sales which can constrain strategic flexibility.

Cost Inflation in Brazil

Sustained labor and contractor inflation in operating regions structurally raises unit costs and compresses margins if not offset by price or productivity gains. In mining, persistent local inflation can erode returns and extend payback periods on new investments.

Lower Ore Grades at Caraíba

Lower mined and processed grades reduce recoverable metal per tonne, increasing unit costs and capital intensity to maintain output. If grade degradation persists, it can structurally raise cash costs per pound and pressure margins and free cash flow over multiple quarters.

Ero Copper Business Overview & Revenue Model

Company Description

Ero Copper Corp., a base metals mining company, engages in the exploration, development, and production of mining projects in Brazil. It engages in the production and sale of copper concentrate from the MCSA Mining Complex located within the Curaçá Valley, northeastern Bahia state, as well as gold and silver byproducts. The company also holds a 100% interest in the Boa Esperança property, a copper development project located within southeastern Pará state; and NX Gold property located in Mato Grosso state. Ero Copper Corp. was incorporated in 2016 and is headquartered in Vancouver, Canada.

How the Company Makes Money

Ero Copper generates revenue primarily through the sale of copper concentrate produced from its mining operations. The company operates on a revenue model that includes the extraction and processing of copper ore, which is then sold to smelters and other industrial customers. Key revenue streams include the sale of copper, as well as by-products such as gold and silver. Ero Copper benefits from strategic partnerships with industry players and established relationships with customers, which help secure long-term contracts and pricing agreements. Additionally, the company may experience fluctuations in revenue based on copper market prices and demand dynamics, influenced by global economic conditions and industry trends.

Ero Copper Financial Statement Overview

Summary

Ero Copper demonstrates solid revenue growth and profitability, supported by a strong income statement. The balance sheet reflects moderate leverage with effective equity utilization. However, cash flow challenges, particularly in free cash flow, indicate potential liquidity risks that need addressing to sustain long-term growth.

Income Statement

Ero Copper shows strong revenue growth with a 9.48% increase in TTM, indicating a positive trajectory. The gross profit margin of 42.71% and net profit margin of 26.62% reflect solid profitability. However, the EBIT margin of 32.93% and EBITDA margin of 48.91% suggest room for improvement in operational efficiency.

Balance Sheet

The company maintains a manageable debt-to-equity ratio of 0.79, indicating moderate leverage. The return on equity of 20.12% is robust, showcasing effective use of equity. However, the equity ratio of 46.45% suggests a balanced but slightly leveraged capital structure.

Cash Flow

Operating cash flow is strong, with a coverage ratio of 1.27, indicating good cash generation relative to net income. However, the negative free cash flow and its significant decline of 83.06% in TTM highlight potential liquidity challenges. The free cash flow to net income ratio of -6.02% suggests inefficiencies in converting income to cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	588.23M	470.26M	427.48M	426.39M	489.92M	324.08M
Gross Profit	233.65M	180.55M	156.84M	187.18M	318.86M	188.14M
EBITDA	292.12M	13.78M	208.15M	206.48M	289.80M	110.92M
Net Income	137.81M	-68.47M	92.80M	101.83M	201.05M	51.62M
Balance Sheet
Total Assets	1.87B	1.46B	1.51B	1.19B	689.76M	497.10M
Cash, Cash Equivalents and Short-Term Investments	66.19M	50.40M	111.74M	317.40M	130.13M	62.51M
Total Debt	637.76M	620.07M	445.84M	429.02M	66.36M	169.85M
Total Liabilities	983.86M	866.95M	702.36M	645.91M	294.27M	283.02M
Stockholders Equity	884.28M	587.13M	804.25M	538.59M	393.06M	212.70M
Cash Flow
Free Cash Flow	32.80M	-192.17M	-297.55M	-152.43M	182.76M	45.03M
Operating Cash Flow	314.02M	145.42M	163.10M	143.39M	364.59M	162.84M
Investing Cash Flow	-285.83M	-335.38M	-308.17M	-425.81M	-179.53M	-116.56M
Financing Cash Flow	24.15M	131.16M	77.75M	327.30M	-115.43M	288.00K

Ero Copper Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 42.5 is above the 20-day moving average (MA) of 38.73, above the 50-day MA of 34.89, and above the 200-day MA of 24.75, indicating a bullish trend. The MACD of 2.14 indicates Negative momentum. The RSI at 67.43 is Neutral, neither overbought nor oversold. The STOCH value of 74.22 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
ERO	76 Outperform	C$4.42B	22.29	17.26%	―	29.97%	658.38%
CS	73 Outperform	C$10.55B	24.98	9.83%	―	44.69%	1216.12%
FM	73 Outperform	$34.49B	534.37	0.41%	―	8.17%	―
LUN	72 Outperform	C$29.56B	717.84	3.33%	0.68%	-19.68%	-90.05%
HBM	70 Outperform	$12.69B	19.70	16.43%	0.07%	5.40%	413.48%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
TKO	54 Neutral	C$3.65B	-54.90	-10.53%	―	1.17%	-169.37%