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Ero Copper Corp

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Ero Copper Corp AI Insights

Informational only. Not investment advice.
As of 2025-12-09

Snapshot

  • Operating margin TTM 30.1% vs industry median 0% - top-tier cost structure in copper mining sector[Operating Margin]
  • Capex TTM of 284M (48% of revenue) consuming 87% of operating cash flow - growth phase straining FCF[Capital Expenditure]
  • Debt/equity 0.72 with net debt 545M vs EBITDA 278M (2.0x leverage) - manageable but elevated for cyclical[Debt to Equity]

Watch Triggers

  • Capital Expenditure: Falls below 150M annuallySignals capex cycle completion and FCF inflection point
  • Free Cash Flow: Exceeds 150M TTMValidates thesis that current FCF suppression is temporary
  • Debt to Equity: Rises above 1.0xWould indicate balance sheet stress in cyclical downturn

Bull Case

Elite profitability (30% op margin, 17% ROE) vs money-losing industry median positions ERO as quality compounder if copper prices hold

Operating MarginROENet Margin

3Y EPS CAGR of 68% demonstrates operational leverage; current capex cycle ending could accelerate shareholder returns

EPS Growth 3yrCapital ExpenditureFree Cash Flow

Bear Case

EPS declined 25% YoY despite strong margins - copper price sensitivity could compress multiples in downturn

EPS Growth 1yrNet IncomePE Ratio

Negative working capital (-45M) and 638M total debt create liquidity risk if commodity prices fall sharply

Working CapitalTotal DebtCash and Equivalents

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
58%

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Forward Thesis

Capex cycle completion should unlock significant FCF expansion as 284M annual spend normalizes

1-3ymed
  • PPE of 1.6B signals major asset build nearing completion
  • Operating cash flow 327M already covers debt service 3.6x
  • Industry FCF median negative vs ERO positive 43M TTM
FCF TTM 43M despite 284M capexEBITDA margin 47% provides cushionROE 17.3% vs industry median -4.2%

Valuation Context

Caveats

Public Strategies Rankings

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Fundamental company data provided by Morningstar, updated daily.

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