Encore Capital Group (NasdaqGS:ECPG) - Share price, News & Analysis

ECPG fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	5/6
Financial Health	4/6
Dividends	0/6

ECPG Stock Overview

Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions and other related services for consumers across financial assets worldwide.

Rewards

Trading at 29.4% below our estimate of its fair value

Earnings grew by 36.3% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 29% per year for the next 3 years

Debt is not well covered by operating cash flow

Encore Capital Group Competitors

PRA Group

NasdaqGS:PRAA

US$1.5b

Intrum

OM:INTRUM

kr27.3b

KRUK Spólka Akcyjna

WSE:KRU

zł4.7b

B2Holding

OB:B2H

kr3.4b

Price History & Performance

Summary of all time highs, changes and price drops for Encore Capital Group
Historical stock prices
Current Share Price	US$56.89
52 Week High	US$72.67
52 Week Low	US$42.53
Beta	1.28
1 Month Change	-3.56%
3 Month Change	-20.45%
1 Year Change	29.68%
3 Year Change	58.42%
5 Year Change	48.73%
Change since IPO	508.86%

Shareholder Returns

	ECPG	US Consumer Finance	US Market
7D	-5.6%	0.6%	0.5%
1Y	29.7%	-20.1%	-11.5%

Return vs Industry: ECPG exceeded the US Consumer Finance industry which returned -16.7% over the past year.

Return vs Market: ECPG exceeded the US Market which returned -8.1% over the past year.

Price Volatility

Is ECPG's price volatile compared to industry and market?
ECPG volatility
ECPG Average Weekly Movement	4.1%
Consumer Finance Industry Average Movement	9.1%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.0%
10% least volatile stocks in US Market	3.0%

Stable Share Price: ECPG is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: ECPG's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1999	6,604	Ashish Masih	https://www.encorecapital.com

Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions and other related services for consumers across financial assets worldwide. The company purchases portfolios of defaulted consumer receivables at deep discounts to face value, as well as manages them by working with individuals as they repay their obligations and works toward financial recovery. It is also involved in the provision of early stage collection, business process outsourcing, and contingent collection services, as well as debt servicing and other portfolio management services to credit originator for non-performing loans.

Encore Capital Group Fundamentals Summary

How do Encore Capital Group's earnings and revenue compare to its market cap?
ECPG fundamental statistics
Market Cap	US$1.42b
Earnings (TTM)	US$431.90m
Revenue (TTM)	US$1.70b

3.2x

P/E Ratio

0.8x

P/S Ratio

Is ECPG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ECPG income statement (TTM)
Revenue	US$1.70b
Cost of Revenue	US$0
Gross Profit	US$1.70b
Other Expenses	US$1.27b
Earnings	US$431.90m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	17.80
Gross Margin	100.00%
Net Profit Margin	25.45%
Debt/Equity Ratio	236.5%

How did ECPG perform over the long term?

See historical performance and comparison

Valuation

Is Encore Capital Group undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

29.4%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ECPG ($56.89) is trading below our estimate of fair value ($80.54)

Significantly Below Fair Value: ECPG is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: ECPG is good value based on its PE Ratio (3.2x) compared to the US Consumer Finance industry average (6.5x).

PE vs Market: ECPG is good value based on its PE Ratio (3.2x) compared to the US market (16x).

Price to Earnings Growth Ratio

PEG Ratio: ECPG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Price to Book Ratio

PB vs Industry: ECPG's PB Ratio (1.1x) is in line with the US Consumer Finance industry average.

Future Growth

How is Encore Capital Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-29.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ECPG's earnings are forecast to decline over the next 3 years (-29% per year).

Earnings vs Market: ECPG's earnings are forecast to decline over the next 3 years (-29% per year).

High Growth Earnings: ECPG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ECPG's revenue is expected to decline over the next 3 years (-9.6% per year).

High Growth Revenue: ECPG's revenue is forecast to decline over the next 3 years (-9.6% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if ECPG's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Encore Capital Group performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

35.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ECPG has high quality earnings.

Growing Profit Margin: ECPG's current net profit margins (25.4%) are higher than last year (19.5%).

Past Earnings Growth Analysis

Earnings Trend: ECPG's earnings have grown significantly by 35.2% per year over the past 5 years.

Accelerating Growth: ECPG's earnings growth over the past year (36.3%) exceeds its 5-year average (35.2% per year).

Earnings vs Industry: ECPG earnings growth over the past year (36.3%) exceeded the Consumer Finance industry 29%.

Return on Equity

High ROE: Whilst ECPG's Return on Equity (34.68%) is high, this metric is skewed due to their high level of debt.

Financial Health

How is Encore Capital Group's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ECPG's short term assets ($3.4B) exceed its short term liabilities ($251.6M).

Long Term Liabilities: ECPG's short term assets ($3.4B) exceed its long term liabilities ($3.1B).

Debt to Equity History and Analysis

Debt Level: ECPG's net debt to equity ratio (222.6%) is considered high.

Reducing Debt: ECPG's debt to equity ratio has reduced from 448.4% to 236.5% over the past 5 years.

Debt Coverage: ECPG's debt is not well covered by operating cash flow (9.8%).

Interest Coverage: ECPG's interest payments on its debt are well covered by EBIT (4.7x coverage).

Balance Sheet

Dividend

What is Encore Capital Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ECPG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ECPG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ECPG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ECPG's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ECPG has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure

CEO

Ashish Masih (55 yo)

4.92yrs

Tenure

US$4,600,775

Compensation

Mr. Ashish Masih has been the Chief Executive Officer and President of Encore Capital Group, Inc. since June 15, 2017. Mr. Masih serves as a Director at Encore Capital Europe Finance Limited. Mr. Masih ser...

CEO Compensation Analysis

Compensation vs Market: Ashish's total compensation ($USD4.60M) is about average for companies of similar size in the US market ($USD5.45M).

Compensation vs Earnings: Ashish's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: ECPG's management team is considered experienced (4 years average tenure).

Board Members

Experienced Board: ECPG's board of directors are considered experienced (6.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/18 00:00
End of Day Share Price	2022/05/18 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31