Ero Copper Corp. (NYSE: ERO)

Sector: Basic Materials Industry: Copper CIK: 0001853860
Market Cap 3.10 Bn
P/B 3.50
P/E 22.50
P/S 5.27
ROIC (Qtr) 8.71
Div Yield % 0.00
Rev 1y % (Qtr) 41.86
Total Debt (Qtr) 638.38 Mn
Debt/Equity (Qtr) 0.72
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About

Investment thesis

Bull case

  • Strong operating cash flow of 326.81M provides robust 0.51x coverage of total debt 638.38M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 326.81M provides exceptional 228.38x coverage of minority interest expenses 1.43M, showing strong core operations.
  • Operating cash flow of 326.81M provides exceptional 12.63x coverage of interest expenses 25.88M, showing strong debt service capability.
  • Operating cash flow of 326.81M provides strong 39.98x coverage of stock compensation 8.18M, indicating sustainable incentive practices.
  • Strong tangible asset base of 1.88B provides 2.94x coverage of total debt 638.38M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 326.81M barely covers its investment activities of (281.76M), with a coverage ratio of -1.16, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of 42.63M provides weak coverage of capital expenditures of 284.17M, with a 0.15 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 198.43M show weak coverage of depreciation charges of 95.47M, with a 2.08 ratio indicating high capital intensity and potential reinvestment needs.
  • Tax assets of 1.82M provide limited offset against tax liabilities of 7.56M, which is 0.24x, indicating potential future cash flow pressure from tax obligations.
  • Tangible assets of 1.88B provide limited backing for working capital of (45.17M), which is -41.54x, suggesting increased operational risk in market downturns.

Products and services [axis] Breakdown of Revenue (2024)

Segment consolidation items [axis] Breakdown of Revenue (2024)

Peer comparison

Companies in the Copper
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SCCO Southern Copper Corp/ 156.08 Bn 124.92 27.85 7.43 Bn
2 FCX Freeport-Mcmoran Inc 50.61 Bn 20.03 3.37 10.39 Bn
3 HBM Hudbay Minerals Inc. 10.18 Bn 21.72 4.93 1.34 Bn
4 ERO Ero Copper Corp. 3.10 Bn 22.50 5.27 0.64 Bn
5 TGB Taseko Mines Ltd 2.34 Bn -57.89 5.41 0.72 Bn
6 IE Ivanhoe Electric Inc. -2.08 Bn 37.85 -565.48 0.07 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.96 1.43
EV to Cash from Ops. EV/CFO 11.28 34.72
EV to Debt EV to Debt 5.77 2.63
EV to EBIT EV/EBIT 18.58 18.51
EV to EBITDA EV/EBITDA 13.53 27.03
EV to Free Cash Flow [EV/FCF] EV/FCF 86.46 -172.92
EV to Market Cap EV to Market Cap 1.19 1.07
EV to Revenue EV/Rev 6.27 -86.78
Price to Book Value [P/B] P/B 3.50 6.28
Price to Earnings [P/E] P/E 22.50 28.19
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 14.62
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.85
Dividend per Basic Share Div per Share (Qtr) 0.00 0.58
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 20.37
Interest Coverage Int. cover (Qtr) 7.67 4.49
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 26.55 3.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 227.53 37.61
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -4.72
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 422.18 116.37
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 50.24 18.35
EBIT Growth (1y) % EBIT 1y % (Qtr) 370.58 78.94
EBT Growth (1y) % EBT 1y % (Qtr) 629.76 127.40
EPS Growth (1y) % EPS 1y % (Qtr) 600.00 119.98
FCF Growth (1y) % FCF 1y % (Qtr) 116.86 -64.06
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 36.79 14.14
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.31 0.32
Cash Payout Ratio Cash Payout Ratio 0.00 0.08
Cash Ratio Cash Ratio (Qtr) 0.26 0.91
Current Ratio Curr Ratio (Qtr) 0.82 1.83
Debt to Equity Ratio Debt/Equity (Qtr) 0.72 0.75
Interest Cover Ratio Int Coverage (Qtr) 7.67 4.49
Times Interest Earned Times Interest Earned (Qtr) 7.67 4.49
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 50.00 -178.60
EBIT Margin % EBIT Margin % (Qtr) 33.73 -204.60
EBT Margin % EBT Margin % (Qtr) 29.33 -228.80
Gross Margin % Gross Margin % (Qtr) 39.50 39.38
Net Profit Margin % Net Margin % (Qtr) 23.40 -236.28