When copper prices are falling, it’s natural for investors to get skittish. That’s exactly what’s been happening this year, and Capstone Copper (TSX:CS) has taken a hit. The copper stock has dropped more than 27% since its April high, reflecting not just weakness in the commodity but also investor nervousness about growth plans and geopolitical risk.
But is the selloff overdone? Or are more losses ahead? Let’s take a closer look at Capstone’s latest results and prospects to answer the big question for July 2025: should you buy, sell, or hold?
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About Capstone
Capstone is a copper miner with operations in Chile, Arizona, and Mexico. Its major draw for investors is the Santo Domingo project in Chile, which it owns alongside the government through a partnership with ENAMI. This massive mine should drive years of future growth, but that’s also where some of the current uncertainty lies.
In its first-quarter 2025 earnings, Capstone reported record revenue of $533 million, up from $340 million a year earlier. The rise was largely due to higher copper prices and some operational headwinds at its Cozamin mine in Mexico. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $180 million, almost double the year before. The copper stock reaffirmed its full-year production guidance and pointed to steady progress on Santo Domingo, which remains on track for first production in 2027.
What to watch
So, what does this all mean for investors? On the one hand, Capstone is clearly in investment mode. It’s spending heavily to build out future production and modernize its operations. That’s a long-term positive, but it also means short-term cash flow is under pressure. Capital expenditures this year should hit $315 million, much of it going toward the Chilean project. This has pushed the company’s net debt down to $788 million year over year, although it’s higher than it was in the last quarter.
Still, management remains confident that the investment will pay off. CEO John MacKenzie emphasized in the latest earnings call that copper remains strong and that Capstone should benefit. That confidence is echoed by analysts, some of whom still see the stock as undervalued based on long-term copper demand from electrification and energy infrastructure. And right now, with copper prices at US$4.50 per pound, it looks as though those beliefs are coming true.
Considerations
What makes this tricky is timing. If you’re looking for short-term gains, Capstone might frustrate. Its earnings are tied closely to copper prices, and right now the macro picture is cloudy. But if you’re a long-term investor willing to ride out some volatility, there’s a case to be made that this is a hold, or even a buy on weakness.
At current prices, Capstone trades at around 1.5 times book value and 25.77 times forward earnings. That’s a steep discount compared to where it traded a year ago, and it doesn’t fully reflect the potential of Santo Domingo or the rebound in copper many expect by 2026. However, that rebound is not guaranteed, and any delay to the project timeline or sustained price weakness could send the stock lower.
Bottom line
If you already own shares, holding likely makes sense. The copper stock isn’t in financial trouble, and the long-term thesis is intact, though it may take patience. If you’re thinking of buying, you’ll want to be comfortable with volatility and have a longer investment horizon. Capstone is not a safe haven. It’s a bet on future copper prices and its ability to bring Santo Domingo online smoothly.
For short-term traders, the recent dip might not be deep enough to justify a buy just yet. But for long-term investors looking for copper exposure with growth upside, Capstone could be one of the better options on the TSX. Just be prepared for a few bumps along the way.
