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Nexa Resources SA (NEXA)
NYSE:NEXA
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Nexa Resources SA
(NYSE:NEXA)
58Neutral
Positive Factors
Growth Potential
The continued ramp-up of operations at Aripuana to its capacity of over 85ktpa zinc and 2.1Mozpa silver remains the strongest driver of growth in NEXA’s portfolio.
Operational Performance
Adjusted EBITDA of $183 million beat consensus estimates due to lower exploration and mining costs.
Negative Factors
Debt and Cash Flow
Significant free cash flow miss with cash burn of $226M, well below estimates and consensus.
Production Challenges
Zinc production was down 8% quarter on quarter and 23% year on year, missing estimates and consensus.
Technical Issues
Challenges with the filter circuit and flotation system at Aripuanã raise concern on capex and the ramp-up timeline at NEXA’s key growth asset.
Nexa Resources SA (NEXA) vs. S&P 500 (SPY)
Market Cap
$682.06M
Dividend YieldN/A
Average Volume (3M)15.98K
Price to Earnings (P/E)―
Beta (1Y)0.40
Revenue Growth6.28%
EPS Growth29.57%
CountryUS
Employees5,760
SectorBasic Materials
Sector Strength63
IndustryIndustrial Materials
Share Statistics
EPS (TTM)0.13
Shares Outstanding132,438,610
10 Day Avg. Volume8,328
30 Day Avg. Volume15,978
Financial Highlights & Ratios
PEG Ratio-0.23
Price to Book (P/B)0.78
Price to Sales (P/S)0.00
P/FCF Ratio16.45
Enterprise Value/Market Cap3.15
Enterprise Value/Revenue0.20
Enterprise Value/Gross Profit3.92
Enterprise Value/Ebitda1.32
Forecast
1Y Price Target
$6.21Price Target Upside17.61% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering6
Nexa Resources SA Business Overview & Revenue Model
Company DescriptionNexa Resources S.A., together with its subsidiaries, engages in the zinc mining and smelting business. The company also produces zinc, silver, gold, copper cement, lead, sulfuric acid, sulfur dioxide, copper sulfate, and limestone deposits. It owns and operates five underground polymetallic mines, including three located in the Central Andes of Peru; and two located in the State of Minas Gerais in Brazil. The company also develops the Aripuanã project located in Mato Grosso, Brazil. It exports its products. The company was formerly known as VM Holding S.A. and changed its name to Nexa Resources S.A. in September 2017. The company was founded in 1956 and is based in Luxembourg, Luxembourg. Nexa Resources S.A. is a subsidiary of Votorantim S.A.
How the Company Makes MoneyNexa Resources SA generates revenue primarily through the sale of non-ferrous metals, particularly zinc, copper, and lead, extracted from its mining operations. The company owns and operates multiple mines and smelters, which allow it to produce and supply these metals to a broad range of industrial sectors, including construction, automotive, and electronics. Nexa's revenue streams are significantly influenced by global commodity prices, production volumes, and operational efficiency. Additionally, the company engages in strategic partnerships and joint ventures to enhance its production capabilities and market reach, thereby contributing to its earnings. Nexa also invests in exploration activities to identify and develop new mining sites, ensuring a sustainable supply of resources in the long term.
Nexa Resources SA Financial Statement Overview
Summary
Nexa Resources SA exhibits operational efficiency with positive EBIT and EBITDA margins. However, substantial net losses result in a negative net profit margin and ROE, indicating profitability challenges. The balance sheet reflects high leverage, which poses financial risk, and cash flow conversion presents challenges despite stable operational cash flow.Income Statement
Nexa Resources SA shows a mixed income statement performance. The gross profit margin for the TTM (Trailing-Twelve-Months) is approximately 19.63%, reflecting a reasonable ability to convert revenue into gross profit. However, the company struggles with profitability, as evidenced by a negative net profit margin of -6.02% due to substantial net losses. Revenue growth from the previous year is modest at 1.01%, indicating slight improvement. EBIT and EBITDA margins are positive at 12.93% and 19.64% respectively, suggesting efficient operations despite net losses.72
Positive
Balance Sheet
The balance sheet indicates a moderately leveraged position with a debt-to-equity ratio of 2.14, pointing to potential financial risk. The company's return on equity (ROE) is negative at -19.34%, aligning with the net losses, which could be concerning for investors. Nonetheless, the equity ratio stands at 18.61%, showing a reasonable proportion of equity financing in total assets.65
Positive
Cash Flow
Cash flow analysis reveals stability in operational cash flow, with an operating cash flow to net income ratio of -1.66, indicating the company generates cash despite net losses. Free cash flow has decreased compared to the previous period, reflecting a need for improved cash management. The free cash flow to net income ratio is -0.25, highlighting challenges in converting earnings to cash.68
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.79B | 2.77B | 2.57B | 3.03B | 2.62B | 1.95B | Gross Profit |
| 548.52M | 538.07M | 296.48M | 638.81M | 656.07M | 387.00M | EBIT |
| 361.27M | 276.39M | -155.37M | 359.22M | 446.19M | 142.49M | EBITDA |
| 548.69M | 608.51M | 190.25M | 686.63M | 716.94M | -290.57M | Net Income Common Stockholders |
| -168.10M | -205.03M | -289.35M | 76.39M | 156.09M | -652.51M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 324.28M | 640.23M | 468.32M | 515.89M | 763.02M | 1.12B | Total Assets |
| 4.71B | 4.64B | 4.84B | 4.89B | 4.90B | 5.06B | Total Debt |
| 1.75B | 1.86B | 1.73B | 1.67B | 1.72B | 2.05B | Net Debt |
| 1.44B | 1.24B | 1.28B | 1.18B | 975.14M | 963.84M | Total Liabilities |
| 3.29B | 3.58B | 3.38B | 3.18B | 3.26B | 3.44B | Stockholders Equity |
| 1.15B | 813.93M | 1.20B | 1.44B | 1.39B | 1.38B |
| Cash Flow | Free Cash Flow | ||||
| 41.47M | 90.71M | -66.39M | -120.43M | 7.78M | -31.99M | Operating Cash Flow |
| 279.01M | 349.72M | 246.85M | 266.63M | 492.99M | 291.70M | Investing Cash Flow |
| -212.88M | -237.61M | -270.35M | -378.93M | -469.27M | -369.20M | Financing Cash Flow |
| 19.14M | 61.94M | -25.28M | -149.23M | -344.13M | 451.62M |
Nexa Resources SA Technical Analysis
Negative
5.28
Price Trends
5.71
Negative
6.14
Negative
6.68
Negative
Market Momentum
-0.18
Positive
37.68
Neutral
10.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEXA, the sentiment is Negative. The current price of 5.28 is below the 20-day moving average (MA) of 5.73, below the 50-day MA of 5.71, and below the 200-day MA of 6.68, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 37.68 is Neutral, neither overbought nor oversold. The STOCH value of 10.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NEXA.
Nexa Resources SA Risk Analysis
Nexa Resources SA disclosed 49 risk factors in its most recent earnings report. Nexa Resources SA reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nexa Resources SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.79B | 35.54 | 2.86% | 7.84% | 7.18% | ― | |
63 Neutral | $757.70M | 27.86 | -7.29% | 1.42% | -4.98% | -192.96% | |
58 Neutral | $682.06M | ― | -20.22% | ― | 6.28% | 29.57% | |
56 Neutral | $3.59B | ― | -9.62% | ― | 4.63% | -3189.81% | |
53 Neutral | $809.94M | ― | -46.32% | 1.61% | 5.81% | -78.45% | |
49 Neutral | $1.97B | -1.18 | -21.24% | 3.71% | 1.29% | -31.16% | |
42 Neutral | $1.13B | ― | -667.42% | ― | ― | -3.49% |
* Basic Materials Sector Average
Performance Comparison
NEXA
Nexa Resources SA
5.28
-2.17
-29.13%
CMP
Compass Minerals International
19.46
6.79
53.59%
GSM
Ferroglobe
4.06
-1.45
-26.32%
STR
Sitio Royalties
18.50
-4.11
-18.18%
MP
MP Materials
21.14
2.72
14.77%
TMC
TMC the metals company Inc.
3.14
1.68
115.07%
Nexa Resources SA Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: -9.12%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Negative
Nexa Resources reported significant challenges in production due to environmental factors and operational issues, leading to decreased production volumes and increased leverage. Despite these challenges, the company highlighted progress in strategic projects and benefits from increased metal prices. However, the overall sentiment was weighed down by the operational and financial challenges faced during the quarter.Q1-2025 Updates
Positive Updates
Increase in Zinc Market Prices
The LME zinc price averaged $2,838 per ton, reflecting a 16% increase year-over-year.
Copper and Silver Price Improvements
LME copper price averaged $9,340 per ton, up 11% year-over-year, and the LME silver price averaged $32 per ounce, up 37% year-over-year.
Cerro Pasco Integration Project Progress
Phase 1 of the Cerro Pasco Integration project, including the tailings pumping and piping system, is progressing on schedule.
Adjusted EBITDA and Margin
Adjusted EBITDA reached $125 million, with a margin of 20% for the quarter.
Negative Updates
Operational Challenges and Production Declines
Zinc production in Q1 2025 was 67,000 tons, down 23% year-over-year due to heavy rainfall and operational issues.
Negative Working Capital Impact
Negative working capital impact of $265 million due to seasonal factors and taxes.
Increased Leverage
Net debt-to-adjusted EBITDA ratio increased from 1.7x to 2.1x, primarily due to decreased cash balance and lower adjusted EBITDA.
Smelting Segment Challenges
Total smelting sales decreased by 6% year-over-year and the cash cost increased to $1.17 per pound.
Company Guidance
During Nexa Resources' Q1 2025 earnings call, the company outlined several key metrics and guidance for the upcoming quarters. Nexa reported an adjusted EBITDA of $125 million, with margins staying within historical ranges despite operational challenges at El Porvenir, Atacocha, and Aripuanã due to heavy rainfall, which led to production volumes slightly below initial estimates. The company's consolidated net revenues totaled $627 million, even with lower smelting sales volumes. The mining cash cost significantly dropped to $0.11 per pound compared to $0.26 per pound last year, driven by higher byproduct contributions and lower treatment charges. For the smelting segment, total sales reached 130,000 tons, a decrease of 6% year-over-year, with a consolidated smelting cash cost of $1.17 per pound, up from $0.98 in the same period last year. Nexa also highlighted a negative working capital impact of $265 million due to seasonal variations, which is expected to normalize over the coming quarters. The company reaffirmed its 2025 CapEx guidance at $347 million and emphasized its commitment to extending the life of its assets through ongoing projects like the Cerro Pasco Integration project.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.