Value
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.9 |
| P/S | 10.0 |
| EV/EBITDA | 9.7 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 3.6x
- ▸PEG: 0.01
- ▸Attractively valued
NEXA · Why this verdict
Why Nexa Resources (NEXA) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score6.5/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Nexa Resources is a metals and mining company with extremely attractive valuation metrics and 42% revenue growth, but three consecutive earnings misses and a current price already exceeding analyst consensus targets make it a high-risk hold rather than a compelling entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The current stock price already exceeds analyst consensus targets by approximately 26%, meaning the risk/reward is structurally negative at current entry levels with no margin of safety for new buyers. Warnings | Analyst consensus price target increases above $17 within 12 months, restoring at least 10% upside from current levels. | Tripped↓Deteriorating |
| CounterThe stock's technical setup shows range-bound momentum with rising volume accumulation, suggesting institutional buyers may be building positions ahead of a potential analyst target revision. | ||
Nexa trades at a forward P/E of only 5.5x with a PEG of 0.01 and free cash flow conversion of 121% relative to net income, placing it among the most attractively valued names in its industrial metals peer group. Valuation breakdown | The discount to intrinsic value narrows as free cash flow generation leads to improved analyst price targets above $16 over the next 12 months. | →Stable |
| CounterMetals mining valuations are tightly linked to commodity prices; a sustained decline in zinc or copper prices could rapidly erode the apparent earnings power underpinning the low P/E. | ||
Revenue grew 42% year-over-year with volume accumulation visible in rising on-balance volume, and the company's return on equity and cash conversion both rank favorably relative to industrial metals peers. Growth breakdown | Revenue growth sustains above 20% year-over-year for the next 2 quarters as metals demand remains resilient. | →Stable |
| CounterRevenue growth driven primarily by commodity price increases rather than volume expansion is inherently cyclical and can reverse quickly with price normalization. | ||
Nexa has missed earnings estimates in 3 of the last 4 quarters with an average negative surprise of -57%, indicating a persistent inability to meet analyst expectations despite strong top-line growth. Bear case | The company returns to meeting or exceeding consensus EPS estimates in at least 2 of the next 3 quarters. | ↓Deteriorating |
| CounterThe most recent quarter showed an inline result after prior deep misses, which may indicate the earnings miss cycle has bottomed and expectations have been sufficiently reset. | ||
The current stock price already exceeds analyst consensus targets by approximately 26%, meaning the risk/reward is structurally negative at current entry levels with no margin of safety for new buyers.
Tripped↓DeterioratingWarnings
- Expectation
- Analyst consensus price target increases above $17 within 12 months, restoring at least 10% upside from current levels.
CounterThe stock's technical setup shows range-bound momentum with rising volume accumulation, suggesting institutional buyers may be building positions ahead of a potential analyst target revision.
Nexa trades at a forward P/E of only 5.5x with a PEG of 0.01 and free cash flow conversion of 121% relative to net income, placing it among the most attractively valued names in its industrial metals peer group.
→StableValuation breakdown
- Expectation
- The discount to intrinsic value narrows as free cash flow generation leads to improved analyst price targets above $16 over the next 12 months.
CounterMetals mining valuations are tightly linked to commodity prices; a sustained decline in zinc or copper prices could rapidly erode the apparent earnings power underpinning the low P/E.
Revenue grew 42% year-over-year with volume accumulation visible in rising on-balance volume, and the company's return on equity and cash conversion both rank favorably relative to industrial metals peers.
→StableGrowth breakdown
- Expectation
- Revenue growth sustains above 20% year-over-year for the next 2 quarters as metals demand remains resilient.
CounterRevenue growth driven primarily by commodity price increases rather than volume expansion is inherently cyclical and can reverse quickly with price normalization.
Nexa has missed earnings estimates in 3 of the last 4 quarters with an average negative surprise of -57%, indicating a persistent inability to meet analyst expectations despite strong top-line growth.
↓DeterioratingBear case
- Expectation
- The company returns to meeting or exceeding consensus EPS estimates in at least 2 of the next 3 quarters.
CounterThe most recent quarter showed an inline result after prior deep misses, which may indicate the earnings miss cycle has bottomed and expectations have been sufficiently reset.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 5.6 |
| Gross margin | 1.6 |
| Op margin | 7.9 |
| Net margin | 4.0 |
| Current ratio | 3.2 |
| FCF quality | 9.5 |
| Moat | 6.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 30%
- ▸Excellent cash conversion: 134% FCF/NI
Growth
9.5/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 9.5 |
- ▸Strong growth: 28% YoY
Momentum
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.0 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 2.6 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+5.0%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.6 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.8 |
| quality rank | 7.7 |
| growth rank | 4.4 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.3 |
| support resistance | 7.1 |
| 52w position | 4.1 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.5 |
| days to cover | 10.0 |
| volatility | 1.5 |
| put call | 3.7 |
| implied vol | 0.4 |
| beta | 7.5 |
| debt equity | 4.5 |
- ▸High IV: 77%
Catalyst
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
- ▸Earnings concerns: 0B/3M
- ▸Earnings today
How the verdict was assembled
Engine trigger
Earnings today. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.5<4.5
- ASYMMETRY:0.4<1.5@spot
- EARNINGS_PROXIMITY:0d<=7d
Warning (0)
none
Reward-to-Risk
0.38
Upside
+3.3%
Downside
8.8%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeSector Rotation — Basic Materials sector out of favor, value=8.9
SuitabilityAggressive — MCap $1.6B<$5B
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings today. Wait until post-earnings. The 10-dimension scores remain Growth at 9.5 (strongest), but MOMENTUM:4.5<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Growth at 9.5, Value at 8.9, and Technical at 6.2; the weakest are Catalyst at 2.5, Momentum at 4.5, and Insider at 5.0. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.38 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Metrics
Trip ifFree cash flow conversion falls below 80% of net income or forward P/E rises above 10x due to earnings contraction.
- P2Strong Revenue Growth
Trip ifRevenue growth falls below 10% year-over-year for 2 consecutive quarters.
- P3Consecutive Earnings Misses
Trip ifEPS surprise falls below -20% in at least 2 of the next 3 quarters.
- P4Price Above Analyst TargetTripped
Trip ifPrice drops below $13.40 stop-loss level or analyst consensus target declines below $12.