Taking everything into account, ERO scores 5 out of 10 in our fundamental rating. ERO was compared to 154 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.
ERO had a positive operating cash flow in the past year.
Of the past 5 years ERO 4 years were profitable.
In the past 5 years ERO always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of ERO (7.34%) is better than 81.17% of its industry peers.
The Return On Equity of ERO (15.57%) is better than 88.96% of its industry peers.
With a decent Return On Invested Capital value of 9.11%, ERO is doing good in the industry, outperforming 75.97% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERO is below the industry average of 10.32%.
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 87.01% of the companies in the same industry.
With an excellent Operating Margin value of 29.97%, ERO belongs to the best of the industry, outperforming 82.47% 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 75.32% of the companies in the same industry.
In the last couple of years the Gross Margin of ERO has remained more or less at the same level.

		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.
ERO has more shares outstanding than it did 1 year ago.
ERO has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, ERO has a worse debt to assets ratio.

2.2 Solvency

An Altman-Z score of 3.31 indicates that ERO is not in any danger for bankruptcy at the moment.
ERO has a Altman-Z score of 3.31. This is comparable to the rest of the industry: ERO outperforms 42.86% of its industry peers.
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.
With a Debt to FCF ratio value of 14.97, ERO perfoms like the industry average, outperforming 58.44% of the companies in the same industry.
A Debt/Equity ratio of 0.64 indicates that 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 77.92% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.64
Debt/FCF	14.97
Altman-Z	3.31

ROIC/WACC0.93

WACC9.85%

2.3 Liquidity

A Current Ratio of 0.82 indicates that ERO may have some problems paying its short term obligations.
ERO's Current ratio of 0.82 is on the low side compared to the rest of the industry. ERO is outperformed by 88.31% of its industry peers.
A Quick Ratio of 0.44 indicates that ERO may have some problems paying its short term obligations.
The Quick ratio of ERO (0.44) is worse than 92.21% of its industry peers.

		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.
ERO shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -2.60% yearly.
Looking at the last year, ERO shows a very strong growth in Revenue. The Revenue has grown by 26.74%.
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

Based on estimates for the next years, ERO will show a very strong growth in Earnings Per Share. The EPS will grow by 31.51% on average per year.
The Revenue is expected to grow by 16.22% on average over the next years. This is quite good.

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

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

A Price/Earnings ratio of 28.88 indicates a quite expensive valuation of ERO.
ERO's Price/Earnings ratio is a bit cheaper when compared to the industry. ERO is cheaper than 77.27% of the companies in the same industry.
When comparing the Price/Earnings ratio of ERO to the average of the S&P500 Index (28.60), we can say ERO is valued inline with the index average.
The Price/Forward Earnings ratio is 9.34, which indicates a very decent valuation of ERO.
Based on the Price/Forward Earnings ratio, ERO is valued cheaply inside the industry as 91.56% of the companies are valued more expensively.
ERO's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.83.

		Industry Rank	Sector Rank
PE	28.88
Fwd PE	9.34

4.2 Price Multiples

66.88% of the companies in the same industry are more expensive than ERO, based on the Enterprise Value to EBITDA ratio.
66.23% 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	87.74
EV/EBITDA	15.59

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.
ERO has a very decent profitability rating, which 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.