TSX:ERO

Stock Analysis Report

Executive Summary

Ero Copper Corp., a base metals mining company, focuses on the production and sale of copper in Brazil.

Snowflake

Fundamentals

Reasonable growth potential with mediocre balance sheet.

Share Price & News

How has Ero Copper's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-0.6%

ERO

0.1%

CA Metals and Mining

-0.2%

CA Market


1 Year Return

56.2%

ERO

12.3%

CA Metals and Mining

1.1%

CA Market

Return vs Industry: ERO exceeded the Canadian Metals and Mining industry which returned 12.3% over the past year.

Return vs Market: ERO exceeded the Canadian Market which returned 1.1% over the past year.


Shareholder returns

EROIndustryMarket
7 Day-0.6%0.1%-0.2%
30 Day-16.9%-5.2%-3.3%
90 Day-33.4%-4.8%-1.6%
1 Year56.2%56.2%13.2%12.3%4.6%1.1%
3 Yearn/a-11.5%-13.1%13.1%3.1%
5 Yearn/a7.5%3.4%24.7%6.7%

Price Volatility Vs. Market

How volatile is Ero Copper's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Ero Copper undervalued compared to its fair value and its price relative to the market?

9.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: ERO (CA$16.62) is trading below our estimate of fair value (CA$18.37)

Significantly Undervalued: ERO is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ERO is poor value based on its PE Ratio (22.9x) compared to the Metals and Mining industry average (13.6x).

PE vs Market: ERO is poor value based on its PE Ratio (22.9x) compared to the Canadian market (13.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: ERO is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: ERO is overvalued based on its PB Ratio (7.7x) compared to the CA Metals and Mining industry average (1.3x).


Next Steps

Future Growth

How is Ero Copper forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

13.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ERO's forecast earnings growth (13.7% per year) is above the savings rate (1.9%).

Earnings vs Market: ERO's earnings (13.7% per year) are forecast to grow faster than the Canadian market (13.6% per year).

High Growth Earnings: ERO's earnings are forecast to grow, but not significantly.

Revenue vs Market: ERO's revenue (7.6% per year) is forecast to grow faster than the Canadian market (5.7% per year).

High Growth Revenue: ERO's revenue (7.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: ERO's Return on Equity is forecast to be high in 3 years time (21.6%)


Next Steps

Past Performance

How has Ero Copper performed over the past 5 years?

209.8%

Last years earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if ERO's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: Insufficient data to compare ERO's past year earnings growth to its 5-year average.

Earnings vs Industry: ERO earnings growth over the past year (209.8%) exceeded the Metals and Mining industry -13.7%.


Return on Equity

High ROE: Whilst ERO's Return on Equity (33.73%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: ERO has a higher Return on Assets than the Metals and Mining industry average last year.


Return on Capital Employed

ROCE Improving: Insufficient data to calculate ERO's Return on Capital Employed to determine if it has improved over the past 3 years.


Next Steps

Financial Health

How is Ero Copper's financial position?


Financial Position Analysis

Short Term Liabilities: ERO's short term assets ($70.9M) exceeds its short term liabilities ($65.4M)

Long Term Liabilities: ERO's short term assets (70.9M) do not cover its long term liabilities (202.5M)


Debt to Equity History and Analysis

Debt Level: ERO's debt to equity ratio (111.9%) is considered high

Reducing Debt: Insufficient data to determine if ERO's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: ERO's debt is well covered by operating cash flow (74.9%).

Interest Coverage: ERO's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet

Inventory Level: ERO has a high level of physical assets or inventory.

Debt Coverage by Assets: ERO's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Ero Copper's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.0%markettop25%6.0%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate ERO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ERO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if ERO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ERO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ERO's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Ero Copper's salary, the management and board of directors tenure and is there insider trading?

2.6yrs

Average management tenure


CEO

David Strang (51yo)

3.4yrs

Tenure

US$1,552,430

Compensation

Mr. David Maxwell Strang serves as a Managing Partner of Ero Resource Partners. Mr. Strang serves as the Chief Executive Officer and President of Ero Copper Corp. He has approximately 20 years of corporate ...


CEO Compensation Analysis

Compensation vs. Market: Insufficient data to establish whether David's total compensation is reasonable compared to companies of similar size in the Canadian market.

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.6yrs

Average Tenure

53yo

Average Age

Experienced Management: ERO's management team is considered experienced (2.6 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

55yo

Average Age

Experienced Board: ERO's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$38,855,00128 Jun 19
Tembo Capital Management Ltd
EntityCompany
Shares1,900,000
Max PriceUS$20.45

Ownership Breakdown


Management Team

  • David Strang (51yo)

    CEO, President & Director

    • Tenure: 3.4yrs
    • Compensation: US$1.55m
  • Deepk Hundal

    VP, General Counsel & Corporate Secretary

    • Tenure: 2.3yrs
  • Eduardo de Come (53yo)

    Co-CEO & CFO of MCSA

    • Tenure: 0yrs
  • Anthea Bath

    Vice President of Technical Services

    • Tenure: 1.3yrs
  • Wayne Drier

    Chief Financial Officer

    • Tenure: 2.6yrs
    • Compensation: US$947.91k
  • Christopher Dunn (59yo)

    Executive Chairman of the Board

    • Tenure: 3.4yrs
    • Compensation: US$1.55m
  • Mike Richard

    Chief Geological Officer

    • Tenure: 2.8yrs
    • Compensation: US$1.04m
  • Makko DeFilippo

    Vice President of Corporate Development

    • Tenure: 2.7yrs
    • Compensation: US$654.15k
  • Manoel de Brito

    Co-CEO & COO of MCSA

    • Tenure: 0yrs
  • Pablo Mejia-Herrera

    Vice President of Exploration

    • Tenure: 1.3yrs

Board Members

  • Robert Getz (56yo)

    Independent Director

    • Tenure: 1.3yrs
  • Steve Busby (59yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$53.03k
  • John Wright (66yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$61.86k
  • David Strang (51yo)

    CEO, President & Director

    • Tenure: 3.4yrs
    • Compensation: US$1.55m
  • Chantal Gosselin (49yo)

    Director

    • Tenure: 0.2yrs
  • Sally Eyre (48yo)

    Director

    • Tenure: 0.2yrs
  • Christopher Dunn (59yo)

    Executive Chairman of the Board

    • Tenure: 3.4yrs
    • Compensation: US$1.55m
  • Lyle Braaten (55yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$53.03k
  • Matthew Wubs (48yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$53.03k

Company Information

Ero Copper Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Ero Copper Corp.
  • Ticker: ERO
  • Exchange: TSX
  • Founded: 2016
  • Industry: Copper
  • Sector: Materials
  • Market Cap: CA$1.422b
  • Shares outstanding: 85.57m
  • Website: https://www.erocopper.com

Number of Employees


Location

  • Ero Copper Corp.
  • 625 Howe Street
  • Suite 1050
  • Vancouver
  • British Columbia
  • V6C 2T6
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EROTSX (The Toronto Stock Exchange)YesCommon SharesCACADOct 2017
ERRP.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDOct 2017
E0BDB (Deutsche Boerse AG)YesCommon SharesDEEUROct 2017

Biography

Ero Copper Corp., a base metals mining company, focuses on the production and sale of copper in Brazil. The company also explores for gold and silver ores. Its principal property is the Vale do Curaçá Prop ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 00:29
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.