ERO Stock Risk & Deep Value Analysis
Ero Copper Corp
Basic Materials • Copper
DVR Score
out of 10
What You Need to Know About ERO Stock
We analyzed Ero Copper Corp using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran ERO through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
ERO Risk Analysis & Red Flags
What Could Go Wrong
A significant and sustained drop in global copper prices, driven by an economic slowdown or increased supply, poses the biggest threat. This would directly reduce revenue and profitability, impacting the funding and timelines of critical growth projects like Furnas, and potentially increasing the cost of debt.
Risk Matrix
Overall
Moderate
Financial
Medium
Market
High
Competitive
Low
Execution
Medium
Regulatory
Medium
Red Flags
- ⚠
High dependence on volatile global copper prices for revenue and profitability.
- ⚠
Capital-intensive nature of mining requires continuous, significant investment in PP&E (e.g., $60.8M in Q1 2026).
- ⚠
Geographical concentration of primary assets in Brazil, exposing it to specific regional political and economic risks.
- ⚠
Liquidity ratios (current/quick) may appear below 1.0 (as noted in prior analysis), requiring robust cash flow management.
Upcoming Risk Events
- 📅
Significant downturn in global copper prices (e.g., economic recession impact)
- 📅
Major operational disruptions or cost overruns at existing mines or new projects
When to Reconsider
- 🚪
Sustained quarterly copper production misses below guidance by more than 10%.
- 🚪
Net debt leverage ratio exceeding 2.0x without clear deleveraging plan.
- 🚪
Copper prices falling below $3.50/lb for two consecutive quarters with no recovery in sight.
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What Does Ero Copper Corp (ERO) Do?
Market Cap
$4.28B
Sector
Basic Materials
Industry
Copper
Employees
3,690
Ero Copper Corp. engages in the exploration, development, and production of mining projects in Brazil. Its flagship asset includes Caraíba operations that comprise the production and sale of copper concentrates located in northeastern Bahia State, Brazil, as well as gold and silver produced and sold as by-products. The company was incorporated in 2016 and is headquartered in Vancouver, Canada.
Visit Ero Copper Corp WebsiteInvestment Thesis
Ero Copper Corp offers a compelling investment opportunity for capitalizing on the accelerating global demand for copper, driven by electrification, renewable energy, and electric vehicles. The company is strategically positioned with its expanding portfolio of high-grade, low-cost assets in Brazil, demonstrating exceptional operational execution and significant revenue/EPS growth. With its flagship Tucumã project ramping up and Furnas in the pipeline, ERO is poised for substantial market share gains and value creation over the next 3-5 years.
Is ERO Stock Undervalued?
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ERO Price Targets & Strategy
12-Month Target
$48.00
Bull Case
$75.00
Bear Case
$20.00
Valuation Basis
11x P/E multiple applied to estimated FY2026 EPS of $4.36 (annualized Q1 2026 EPS plus conservative growth).
Entry Strategy
Dollar-cost average between $27-$30, with a potential deeper entry at $24.43 (Q1 2026 report day price) representing a strong support zone.
Exit Strategy
Take partial profits at $45-$50. Re-evaluate at $75+ for further upside. Place a stop-loss order at $22.00 if fundamental outlook deteriorates.
Portfolio Allocation
5% for moderate-to-aggressive risk tolerance, considering exposure to commodity price volatility.
Price Targets & Strategy
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Is ERO Financially Healthy?
Valuation
P/E Ratio
10.67
Forward P/E
13.41
EV/EBITDA
4.84
PEG Ratio
-0.72
Price/Book
4.56
Price/Sales
3.38
Profitability
Gross Margin
42.87%
Operating Margin
34.56%
Net Margin
31.63%
Return on Equity
31.24%
Revenue Growth
88.73%
EPS
$2.80
Balance Sheet
Current Ratio
1.06
Quick Ratio
0.61
Debt/Equity
0.68
Total Debt
$535.70M
Cash & Equivalents
$55.00M
Cash Flow
Operating Cash Flow
$92.80M
Free Cash Flow
$29.30M
EBITDA
$175.50M
Other
Beta (Volatility)
2.09
Does ERO Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
3 Identified
Ero's moat is durable due to the significant capital investment, geological expertise, and operational know-how required to develop and operate large-scale, low-cost copper mines. The rarity of high-quality greenfield projects further reinforces the value of its existing and developing assets.
Moat Erosion Risks
- •Sustained declines in global copper prices that erode even low-cost margins.
- •Increased regulatory burdens or political instability in Brazil impacting mining operations.
- •Exhaustion of high-grade resources without sufficient new discoveries.
ERO Competitive Moat Analysis
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ERO Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral to Bullish, driven by strong earnings and positive copper market outlook, though specific retail buzz is not quantified.
Institutional Sentiment
Positive, evidenced by 71.3% institutional ownership and analysts maintaining generally positive price targets (average $31.50, high $51.00) following strong Q1 earnings.
Insider Activity (Form 4)
No Form 4 insider transactions were found in the provided research for the last 90 days. Institutional ownership remains high with FIL Limited reporting a 10.0% beneficial stake as of March 31, 2026.
Options Flow
Normal options activity; no specific unusual option flows were identified in the provided research data.
Earnings Intelligence
Next Earnings
Estimated early August 2026
Surprise Probability
Medium-High, given the strong Q1 2026 beat and ongoing operational improvements, but subject to commodity price fluctuations.
Historical Earnings Pattern
The stock tends to react positively to strong operational results and earnings beats, as demonstrated by the Q1 2026 report exceeding EPS consensus significantly.
Key Metrics to Watch
Competitive Position
Top Competitor
Freeport-McMoRan (FCX) or First Quantum Minerals (FM) for diversified copper exposure, although ERO operates in a more focused regional niche with specific low-cost assets.
Market Share Trend
Gaining, primarily driven by successful project execution and ramp-up of new production facilities like Tucumã.
Valuation vs Peers
Trading at a trailing P/E of 9.62, Ero Copper appears to be at a discount or comparable to many pure-play copper miners, especially considering its robust growth trajectory, suggesting potential for multiple expansion.
Competitive Advantages
- •Low-cost copper production profile from high-grade assets in Brazil.
- •Established infrastructure and operational expertise in its primary mining jurisdiction.
- •Strong exploration track record leading to resource expansion and project pipeline (e.g., Furnas).
Market Intelligence
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What Could Drive ERO Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings Report (estimated early August 2026)
- •Continued ramp-up and optimization of Tucumã copper production
Medium-Term (6-18 months)
- •Furnas project updates (permitting, financing, and Final Investment Decision - FID)
- •Ongoing exploration success extending mine life and resource base
Long-Term (18+ months)
- •Full-scale production commencement from Furnas project
- •Potential strategic acquisitions or joint ventures to further expand asset base
Catalysts & Growth Drivers
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What's the Bull Case for ERO?
- ✓
Consistent achievement or surpassing of production guidance for copper and gold.
- ✓
Positive updates and progression on the Furnas project development timeline and budget.
- ✓
Maintenance of a strong balance sheet and robust operating cash flow generation.
Bull Case Analysis
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Competing with ERO
See how Ero Copper Corp compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Ero Copper Corp ERO | $4.3B | 9.0 | 10.7 | $263.2M | 31.6% | 88.7% | |
Air Products and Chemicals Inc APD | $65.8B | 1.2 | -197.5 | $12.0B | -2.7% | 1.4% | Compare → |
Freeport-McMoRan Inc FCX | $88.3B | 0.6 | 40.1 | $24.9B | 7.8% | -28.0% | Compare → |
Newmont Corporation NEM | $130.0B | 1.0 | 17.4 | $22.7B | 31.7% | 21.0% | Compare → |
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How Ero Copper Corp Makes Money
Ero Copper Corp is a Canadian-headquartered mining company focused on the extraction and processing of copper from its primary operating sites in Brazil, notably the Caraíba operations and the recently commissioned Tucumã project. The company generates revenue by mining copper ore, producing copper concentrate (and some gold byproduct), and then selling these concentrates on the international commodity markets. Its business model thrives on the efficiency of its low-cost operations and the global demand for copper, a critical metal for modern infrastructure, electronics, and the green energy transition.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Ero Copper Corp (ERO)?
As of May 16, 2026, Ero Copper Corp has a DVR Score of 9.0 out of 10, placing it in the "Hidden Gem" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Ero Copper Corp?
Ero Copper Corp's market capitalization is approximately $4.3B. The company operates in the Basic Materials sector within the Copper industry.
What ticker symbol does Ero Copper Corp use?
ERO is the ticker symbol for Ero Copper Corp. The company trades on the NYQ.
What is the risk level for ERO stock?
Our analysis rates Ero Copper Corp's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of ERO?
Ero Copper Corp currently has a price-to-earnings (P/E) ratio of 10.7. This is below the market average, which could indicate the stock is undervalued or facing headwinds.
Is Ero Copper Corp's revenue growing?
Ero Copper Corp has reported revenue growth of 88.7%. The company is showing strong top-line momentum.
Is ERO stock profitable?
Ero Copper Corp has a profit margin of 31.6%. This indicates strong profitability.
How often is the ERO DVR analysis updated?
Our AI-powered analysis of Ero Copper Corp is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 16, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for ERO (Ero Copper Corp) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.