One-glance verdict
Overvalued
$14.98 our estimate vs market $29.05
Wall Street consensus: $42.40 (183.1% higher than our fair-value estimate)
94% above our estimate, beyond the bull case
Fundamentals snapshot
Ero Copper Corp.
ERO · NYQ · Basic Materials · Copper
Current price
$29.05
52-week range
$19.09 - $40.83
Market cap
$3.03B
Balance sheet
Watch
17.38x Strong cushion
Net debt $471.61M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 67.1% last year.
- Reward Returns 30.8% on equity, ahead of 80% of its peers.
- Risk Net debt grew 372.1% over 3 years.
- Risk Insider ownership is only 2.3% (peer median: 8.1%).
What this company does
Ero Copper Corp.
Ero Copper Corp. mines and sells copper, gold, and silver from its operations in Brazil. The majority of its earnings come from selling copper concentrates, which are materials made richer in copper through processing. This matters because copper is a crucial metal for many industries, especially electronics and construction, so strong sales of copper directly impact the company's financial health and profitability.
How the company got here
Ero Copper Corp. was established in 2016, with its roots in mining operations primarily in Brazil. The company's journey has been centered around developing and bringing to production its key copper assets. Its main focus has been the Caraíba operations, which have become the cornerstone of its business, producing copper concentrates along with valuable by-products like gold and silver. Headquartered in Vancouver, Canada, Ero Copper has grown to become a significant player in the copper mining sector, driven by its strategic development of these Brazilian resources.
What it actually does
Ero Copper Corp. is a mining company that extracts and processes copper ore to produce copper concentrate. Think of copper concentrate as a semi-finished product, like a concentrated juice, that is then sold to smelters and refiners who turn it into the pure copper used in everything from electrical wiring to plumbing. In addition to copper, the company also extracts and sells gold and silver that are found alongside the copper, treating them as valuable by-products of the main mining operation.
Caraíba Operations
The Caraíba Operations represent Ero Copper's primary business and are located in Bahia State, Brazil. This segment is focused on the production and sale of copper concentrates, which is the company's main revenue driver. Alongside the copper, this operation also yields gold and silver as by-products, which are sold separately, adding to the overall profitability. This integrated approach allows Ero Copper to maximize the value extracted from its mining sites. The Caraíba Operations are the heart of Ero Copper's current production and financial performance.
What management is betting on now
Ero Copper's management is focused on expanding its production capacity and exploring new opportunities within its existing mining regions in Brazil. A key strategic priority is to increase the output from its Caraíba Operations, aiming to produce more copper concentrate to meet growing global demand. The company is also investing in further exploration to identify and develop new mineral deposits, which could lead to future growth and diversification. This strategy aims to solidify Ero Copper's position as a leading copper producer by leveraging its current assets and seeking out new resource potential.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $14.98 vs current price $29.05
Wall Street consensus is the average analyst price target: $42.40 (183.1% higher than our fair-value estimate).
Our most-likely fair value is $14.98 a share — about 48.4% below today's price of $29.05, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $471.6M. Interest coverage 17.4x.
Net debt
$471.61M
Interest coverage
17.38x
Ero Copper Corp.'s profit covers its interest bill about 17.4 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
ERO
BASELINE
Ero Copper Corp.
Total debt $573.36M Interest coverage 17.38x This is the baseline the peer rows are being compared against.
Total debt $4.95B Interest coverage 4.12x -76% vs ERO Carries about 4.2x less debt cushion than ERO.
Total debt $1.04B Interest coverage 6.27x -64% vs ERO Carries about 2.8x less debt cushion than ERO.
Total debt $36.65M Interest coverage -26.81x -100% vs ERO This peer has almost no interest-payment cushion compared with ERO.
Total debt — Interest coverage 4.24x -76% vs ERO Carries about 4.1x less debt cushion than ERO.
Total debt $10.36B Interest coverage 17.62x +1% vs ERO Has roughly the same debt cushion as ERO.
What you should know
The case for and against ERO
3 Rewards
2 Risks
Rewards
-
Revenue grew 67.1% last year.
-
Returns 30.8% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 1/10 years.
Risks
-
Net debt grew 372.1% over 3 years.
-
Insider ownership is only 2.3% (peer median: 8.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
9.85x
Forward P/E
5.89x
P/B
2.50x
P/S
2.90x
EV/EBITDA
6.78x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
43.0%
Operating margin
37.6%
Net margin
29.8%
ROE
30.8%
ROA
12.0%
Health
Liquidity and balance-sheet strength
Debt / equity
0.47x
Current ratio
1.37x
Quick ratio
0.69x
Total debt
$573.36M
Total cash
$101.74M
Growth
How the business has been compounding
Revenue TTM
$1.04B
Revenue 5Y CAGR
22.6%
EPS TTM
2.95
EPS 5Y CAGR
32.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$395.14M
Free CF TTM
$112.70M
FCF margin
10.8%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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