ERO COPPER CORP (ERO.CA) Stock Fundamental Analysis
Canada - Toronto Stock Exchange - TSX:ERO - CA2960061091 - Common Stock
48.04 CAD
+2.19 (+4.78%)
Taking everything into account, ERO scores 6 out of 10 in our fundamental rating. ERO was compared to 820 industry peers in the Metals & Mining industry. ERO scores excellent on profitability, but there are concerns on its financial health. ERO has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination!
1. Profitability
1.1 Basic Checks
- ERO had positive earnings in the past year.
- ERO had a positive operating cash flow in the past year.
- Of the past 5 years ERO 4 years were profitable.
- Each year in the past 5 years ERO had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 7.34%, ERO belongs to the top of the industry, outperforming 90.85% of the companies in the same industry.
- ERO's Return On Equity of 15.57% is amongst the best of the industry. ERO outperforms 93.66% of its industry peers.
- ERO's Return On Invested Capital of 9.11% is amongst the best of the industry. ERO outperforms 93.29% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ERO is below the industry average of 12.04%.
- The 3 year average ROIC (8.14%) for ERO is below the current ROIC(9.11%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.34% | ||
| ROE | 15.57% | ||
| ROIC | 9.11% |
ROA(3y)3.34%
ROA(5y)9.91%
ROE(3y)6.26%
ROE(5y)18.84%
ROIC(3y)8.14%
ROIC(5y)19.2%
1.3 Margins
- Looking at the Profit Margin, with a value of 23.43%, ERO belongs to the top of the industry, outperforming 94.76% of the companies in the same industry.
- ERO has a better Operating Margin (29.97%) than 94.51% of its industry peers.
- In the last couple of years the Operating Margin of ERO has remained more or less at the same level.
- Looking at the Gross Margin, with a value of 39.72%, ERO belongs to the top of the industry, outperforming 93.05% of the companies in the same industry.
- ERO's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.97% | ||
| PM (TTM) | 23.43% | ||
| GM | 39.72% |
OM growth 3Y-22.63%
OM growth 5Y-1.37%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-16.13%
GM growth 5Y-1.36%
2. Health
2.1 Basic Checks
- ERO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for ERO has been increased compared to 1 year ago.
- The number of shares outstanding for ERO has been increased compared to 5 years ago.
- ERO has a worse debt/assets ratio than last year.
2.2 Solvency
- ERO has an Altman-Z score of 3.30. This indicates that ERO is financially healthy and has little risk of bankruptcy at the moment.
- ERO has a Altman-Z score (3.30) which is comparable to the rest of the industry.
- The Debt to FCF ratio of ERO is 14.97, which is on the high side as it means it would take ERO, 14.97 years of fcf income to pay off all of its debts.
- ERO has a better Debt to FCF ratio (14.97) than 89.39% of its industry peers.
- A Debt/Equity ratio of 0.64 indicates that ERO is somewhat dependend on debt financing.
- ERO's Debt to Equity ratio of 0.64 is on the low side compared to the rest of the industry. ERO is outperformed by 71.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.64 | ||
| Debt/FCF | 14.97 | ||
| Altman-Z | 3.3 |
ROIC/WACC0.93
WACC9.83%
2.3 Liquidity
- ERO has a Current Ratio of 0.82. This is a bad value and indicates that ERO is not financially healthy enough and could expect problems in meeting its short term obligations.
- ERO has a Current ratio of 0.82. This is in the lower half of the industry: ERO underperforms 63.54% of its industry peers.
- A Quick Ratio of 0.44 indicates that ERO may have some problems paying its short term obligations.
- ERO has a worse Quick ratio (0.44) than 69.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.44 |
3. Growth
3.1 Past
- ERO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 52.44%, which is quite impressive.
- The Earnings Per Share has been decreasing by -2.60% on average over the past years.
- Looking at the last year, ERO shows a very strong growth in Revenue. The Revenue has grown by 26.74%.
- ERO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.55% yearly.
EPS 1Y (TTM)52.44%
EPS 3Y-30.56%
EPS 5Y-2.6%
EPS Q2Q%0%
Revenue 1Y (TTM)26.74%
Revenue growth 3Y-1.36%
Revenue growth 5Y10.55%
Sales Q2Q%41.86%
3.2 Future
- The Earnings Per Share is expected to grow by 31.51% on average over the next years. This is a very strong growth
- Based on estimates for the next years, ERO will show a quite strong growth in Revenue. The Revenue will grow by 16.22% on average per year.
EPS Next Y179.88%
EPS Next 2Y122.58%
EPS Next 3Y71.31%
EPS Next 5Y31.51%
Revenue Next Year60.62%
Revenue Next 2Y52.71%
Revenue Next 3Y32.18%
Revenue Next 5Y16.22%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 28.09, the valuation of ERO can be described as expensive.
- Based on the Price/Earnings ratio, ERO is valued cheaply inside the industry as 91.83% of the companies are valued more expensively.
- ERO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.82.
- The Price/Forward Earnings ratio is 9.09, which indicates a very decent valuation of ERO.
- 95.12% of the companies in the same industry are more expensive than ERO, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 25.95. ERO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.09 | ||
| Fwd PE | 9.09 |
4.2 Price Multiples
- ERO's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. ERO is cheaper than 93.29% of the companies in the same industry.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ERO indicates a rather cheap valuation: ERO is cheaper than 92.32% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 85.36 | ||
| EV/EBITDA | 15.49 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- The excellent profitability rating of ERO may justify a higher PE ratio.
- ERO's earnings are expected to grow with 71.31% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.16
PEG (5Y)N/A
EPS Next 2Y122.58%
EPS Next 3Y71.31%
5. Dividend
5.1 Amount
- ERO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ERO COPPER CORP / ERO.CA FAQ
What is the fundamental rating for ERO stock?
ChartMill assigns a fundamental rating of 6 / 10 to ERO.CA.
What is the valuation status of ERO COPPER CORP (ERO.CA) stock?
ChartMill assigns a valuation rating of 8 / 10 to ERO COPPER CORP (ERO.CA). This can be considered as Undervalued.
What is the profitability of ERO stock?
ERO COPPER CORP (ERO.CA) has a profitability rating of 8 / 10.
What is the valuation of ERO COPPER CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for ERO COPPER CORP (ERO.CA) is 28.09 and the Price/Book (PB) ratio is 4.11.