Encore Capital Group (ECPG): Assessing Its Valuation After Recent Share Price Gains

Encore Capital Group (ECPG) shares have seen some movement recently, sparking interest from investors looking to interpret what is driving the latest trends. Taking a closer look at past performance can help put things in perspective.

See our latest analysis for Encore Capital Group.

After a surge earlier this month, Encore Capital Group’s share price has continued to build momentum, climbing more than 13% over the last week alone, with a 20.7% gain over the past three months. However, its one-year total shareholder return remains in negative territory, highlighting a mixed picture for longer-term holders.

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With recent gains still leaving shares trading well below analyst price targets, the key question for investors is whether Encore Capital Group is truly undervalued or if the market has already taken its potential for renewed growth into account.

Most Popular Narrative: 21.5% Undervalued

Encore Capital Group’s most widely followed valuation perspective suggests a fair value of $60.25, substantially above the recent close of $47.31. This creates a sharp contrast between current market skepticism and high analyst conviction in the stock’s earnings turnaround.

Management's ability to selectively deploy capital toward the most attractive markets (primarily the U.S.), combined with flexible global funding, is allowing Encore to maximize risk-adjusted returns and maintain a scalable, efficient expense structure. This boosts operating leverage and long-term profitability.

Read the complete narrative.

Curious which bold financial forecasts could justify such a bullish price target? The driving force behind the narrative is a projected transformation from heavy losses to profits typically found in much higher-growth sectors. Want to unpack the specific assumptions making this possible? See what’s behind the numbers.

Result: Fair Value of $60.25 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifts in U.S. credit conditions or tighter regulatory scrutiny could quickly challenge Encore’s growth outlook, putting pressure on both revenue and profit expectations.

Find out about the key risks to this Encore Capital Group narrative.

Build Your Own Encore Capital Group Narrative

If you see things differently, or are keen to dig into Encore Capital Group’s fundamentals yourself, you can shape your own view in just a few minutes. Do it your way

A great starting point for your Encore Capital Group research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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