Operating Margin - Auren Energia SA (BOVESPA:AURE3)

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Price: 12.26 BRL -0.57%

Market Cap: 12.9B BRL

14.1%

Current

16%

Average

13.8%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

14.1%

Operating Profit

1.6B

Revenue

11.1B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
BR	A	Auren Energia SA BOVESPA:AURE3	12.8B BRL	14%
CN		China Yangtze Power Co Ltd SSE:600900	686.1B CNY	53%
ID	B	Barito Renewables Energy PT Tbk IDX:BREN	1 281T IDR	72%
CN		Huaneng Lancang River Hydropower Inc SSE:600025	169.6B CNY	50%
CN		China Longyuan Power Group Corp Ltd HKEX:916	149.1B HKD	36%
IN		Adani Green Energy Ltd NSE:ADANIGREEN	1.7T INR	57%
CN		China Three Gorges Renewables Group Co Ltd SSE:600905	118.4B CNY	34%
ES	E	EDP Renovaveis SA ELI:EDPR	12.4B EUR	24%
CN		Sichuan Chuantou Energy Co Ltd SSE:600674	70.4B CNY	31%
IN		NHPC Ltd NSE:NHPC	774.8B INR	40%
IN	N	Ntpc Green Energy Ltd NSE:NTPCGREEN	771.3B INR	51%

Auren Energia SA
Glance View

Market Cap

12.8B BRL

Industry

Utilities

In the vibrant landscape of Brazil's energy sector, Auren Energia SA has emerged as a significant player, knitting together the threads of sustainability and innovation. Founded with a vision to harness the nation’s vast and varied natural resources, Auren Energia has steadily built its operations across diverse energy segments. The company stands as a crucial bridge between the past reliance on traditional energy and a future pivot towards greener sources. With hydroelectric power at its backbone, Auren Energia captures the immense power generated by Brazil's extensive river systems. This not only positions them as a dominant force in the renewable energy sector but also aligns with global trends towards carbon neutrality. Moreover, Auren has been expanding its portfolio into other renewable arenas such as solar and wind, ensuring a diversified energy mix that caters to the ever-growing demands of the domestic and international markets. Auren’s business model thrives on the dual pillars of production and efficiency. By owning and operating numerous hydroelectric plants, they can sell electricity directly to both regulated and free markets. The company capitalizes on long-term power purchase agreements (PPAs) that guarantee a steady revenue stream. The liberalization of Brazil's energy market has further augmented Auren's profitability, enabling them to offer competitive rates to large corporate clients. However, generating energy is only part of the equation. Auren Energia invests heavily in cutting-edge technology and infrastructure to optimize their supply chain, reduce transmission losses, and maximize generation capabilities. In doing so, they not only uphold operational excellence but also cement their role as a leader in crafting a sustainable energy future for Brazil and beyond.

View AURE3 Analysis

AURE3 Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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	Mastercard Inc NYSE:MA	571.93 USD 1.52%
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Auren Energia SA
BOVESPA:AURE3