Encore Capital Group (ECPG): Examining Valuation After Recent Share Price Momentum

Encore Capital Group (ECPG) has caught investors’ attention lately, especially after its stock price moved up over 3% in the past day and has climbed around 10% over the past month. This kind of run raises questions about what is driving interest and how the company’s fundamentals stack up right now.

See our latest analysis for Encore Capital Group.

The recent surge in Encore Capital Group’s share price has turned heads, and it follows an even stronger rally over the past three months. Although momentum is building in the short term, looking at the long view, the 1-year total shareholder return tells a quieter story, coming in at less than 1%. This suggests that much of the recent excitement may reflect shifting sentiment or changing risk perceptions rather than a long-term track record of outperformance.

If this kind of rapid shift has you curious about where momentum could strike next, now is a great time to broaden your search and discover fast growing stocks with high insider ownership

With gains accelerating and Encore Capital Group trading nearly 22% below average analyst price targets, the key question is whether investors are overlooking hidden value or if the market has already factored in the company’s growth potential.

Most Popular Narrative: 18.2% Undervalued

Encore Capital Group's narrative-driven fair value of $60.25 stands notably higher than its last close at $49.29, drawing attention to bullish long-term expectations over current market skepticism.

The combination of rising U.S. consumer credit card balances and elevated charge-off rates is fueling a sustained increase in the supply of non-performing loans available for purchase at attractive prices. This is expected to drive continued record levels of portfolio purchases and revenue growth. Increased investment in digital collections channels and operational innovation is delivering higher-than-forecast collection rates, with actual recoveries exceeding estimates, supporting improvements to both net margins and earnings.

Read the complete narrative.

Want to see where the math gets ambitious? This narrative leans on aggressive growth across revenues, margins, and buybacks to justify such a high target. Curious which fundamental drivers are turning heads? Find out which factors drive that bold fair value statement.

Result: Fair Value of $60.25 (UNDERVALUED)

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

However, Encore’s reliance on the U.S. market and rising funding costs could quickly shift sentiment if credit trends or borrowing conditions worsen.

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

Build Your Own Encore Capital Group Narrative

If you want to challenge the consensus or dig deeper into the details, you can build your own perspective in under three minutes. Do it your way

A great starting point for your Encore Capital Group research is our analysis highlighting 3 key rewards and 1 important warning sign 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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