Overall ERO gets a fundamental rating of 5 out of 10. We evaluated ERO against 155 industry peers in the Metals & Mining industry. ERO has an excellent profitability rating, but there are concerns on its financial health. An interesting combination arises when we look at growth and value: ERO is growing strongly while it also seems undervalued.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year ERO was profitable.
In the past year ERO had a positive cash flow from operations.
Of the past 5 years ERO 4 years were profitable.
ERO had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

Looking at the Return On Assets, with a value of 7.34%, ERO belongs to the top of the industry, outperforming 81.41% of the companies in the same industry.
ERO has a better Return On Equity (15.57%) than 89.10% of its industry peers.
With a decent Return On Invested Capital value of 9.11%, ERO is doing good in the industry, outperforming 76.28% of the companies in the same industry.
ERO had an Average Return On Invested Capital over the past 3 years of 8.14%. This is below the industry average of 10.34%.
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

ERO has a Profit Margin of 23.43%. This is amongst the best in the industry. ERO outperforms 87.18% of its industry peers.
Looking at the Operating Margin, with a value of 29.97%, ERO belongs to the top of the industry, outperforming 82.69% of the companies in the same industry.
ERO's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 39.72%, ERO is in the better half of the industry, outperforming 76.28% 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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ERO is destroying value.
Compared to 1 year ago, ERO has more shares outstanding
Compared to 5 years ago, ERO has more shares outstanding
ERO has a worse debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 3.03 indicates that ERO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.03, ERO is in line with its industry, outperforming 42.31% of the companies in the same industry.
ERO has a debt to FCF ratio of 14.97. This is a negative value and a sign of low solvency as ERO would need 14.97 years to pay back of all of its debts.
ERO has a Debt to FCF ratio (14.97) which is comparable to the rest of the industry.
ERO has a Debt/Equity ratio of 0.64. This is a neutral value indicating ERO is somewhat dependend on debt financing.
ERO has a Debt to Equity ratio of 0.64. This is in the lower half of the industry: ERO underperforms 77.56% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.64
Debt/FCF	14.97
Altman-Z	3.03

ROIC/WACC0.94

WACC9.69%

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.
Looking at the Current ratio, with a value of 0.82, ERO is doing worse than 88.46% of the companies in the same industry.
ERO has a Quick 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.
Looking at the Quick ratio, with a value of 0.44, ERO is doing worse than 92.31% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	0.82
Quick Ratio	0.44

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WACC

Debt/Equity

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Altman-Z score

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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.
The Revenue has grown by 26.74% in the past year. This is a very strong growth!
Measured over the past years, ERO shows a quite strong growth in Revenue. The Revenue has been growing by 10.55% on average per year.

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
ERO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 16.22% yearly.

EPS Next Y178.36%

EPS Next 2Y121.75%

EPS Next 3Y71.79%

EPS Next 5Y31.51%

Revenue Next Year60.62%

Revenue Next 2Y52.71%

Revenue Next 3Y32.18%

Revenue Next 5Y16.22%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 26.27, ERO can be considered very expensive at the moment.
ERO's Price/Earnings ratio is rather cheap when compared to the industry. ERO is cheaper than 83.33% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.21. ERO is around the same levels.
ERO is valuated reasonably with a Price/Forward Earnings ratio of 8.56.
94.23% of the companies in the same industry are more expensive than ERO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.26, ERO is valued rather cheaply.

		Industry Rank	Sector Rank
PE	26.27
Fwd PE	8.56

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, ERO is valued a bit cheaper than 71.79% of the companies in the same industry.
68.59% of the companies in the same industry are more expensive than ERO, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	79.81
EV/EBITDA	13.9

4.3 Compensation for Growth

ERO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ERO has a very decent profitability rating, which may justify a higher PE ratio.
ERO's earnings are expected to grow with 71.79% in the coming years. This may justify a more expensive valuation.