Fact based stock research
Ero Copper (TSX:ERO)

CA2960061091

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Ero Copper stock research in summary

erocopper.com

ANALYSIS: With an Obermatt Combined Rank of 33 (worse than 67% compared with investment alternatives), Ero Copper (Copper, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Ero Copper are a good value (attractively priced) with a consolidated Value Rank of 64 (better than 64% of alternatives), show above-average growth (Growth Rank of 63) but are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 33, is a hold recommendation based on Ero Copper's financial characteristics. As the company Ero Copper's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 64) and above-average growth (Obermatt Growth Rank of 63), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 8) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	64
Growth Rank	63
Safety Rank	8
Combined Rank	33

Country	Canada
Industry	Copper
Index	Copper, Iron, Lithium, Rare Earth, Silver, Uranium, TSX Composite
Size class	Medium

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Ero Copper

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	21	25	26	64
GROWTH
GROWTH	80	23	71	63
SAFETY
SAFETY	61	25	4	8
SENTIMENT
SENTIMENT	n/a	69	64	^new
360° VIEW
360° VIEW	n/a	17	24	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Ero Copper is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	21	25	26	64
GROWTH
GROWTH	80	23	71	63
SAFETY
SAFETY	61	25	4	8
COMBINED
COMBINED	63	6	14	33

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Ero Copper the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 64 (better than 64% compared with alternatives), Ero Copper shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Ero Copper. Price-to-Sales (P/S) is 53, which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value concerning Ero Copper's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 97% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 41 (dividends are expected to be higher than for 41% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 76% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Ero Copper to 24. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 64, is a buy recommendation based on Ero Copper's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	26	37	30	53
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	78	87	83	97
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	18	14	23	24
DIVIDEND YIELD
DIVIDEND YIELD	1	1	1	41
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	21	25	26	64

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Ero Copper; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Ero Copper shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ero Copper. Sales Growth has a rank of 100 which means that currently professionals expect the company to grow more than 100% of its competitors. Stock Returns are also above average with a rank of 57. But Capital Growth has only a rank of 30, which means that currently professionals expect the company to grow its invested capital less than 70% of its competitors. Profit Growth is also low, with a rank of only 39, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 57% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	80	18	94	100
PROFIT GROWTH
PROFIT GROWTH	n/a	56	62	39
CAPITAL GROWTH
CAPITAL GROWTH	n/a	58	18	30
STOCK RETURNS
STOCK RETURNS	49	19	67	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	80	23	71	63

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Ero Copper.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Ero Copper has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Ero Copper is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Ero Copper. Liquidity is at 49, meaning that the company generates less profit to service its debt than 51% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 10, meaning the company has an above-average debt-to-equity ratio. It has more debt than 90% of its competitors. Finally, Refinancing is at a rank of 3 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 97% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Ero Copper has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Ero Copper because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	68	11	4	10
REFINANCING
REFINANCING	18	28	15	3
LIQUIDITY
LIQUIDITY	86	64	33	49
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	61	25	4	8

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Ero Copper and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	50	28	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	91	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	66	87	^new
MARKET PULSE
MARKET PULSE	n/a	22	68	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	69	64	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Ero Copper.
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