ENCORE CAPITAL GROUP INC (ECPG) Stock Fundamental Analysis
NASDAQ:ECPG - US2925541029 - Common Stock
41.84 USD
+0.42 (+1.01%)
41.84 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to ECPG. ECPG was compared to 54 industry peers in the Consumer Finance industry. While ECPG is still in line with the averages on profitability rating, there are concerns on its financial health. ECPG may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
ECPG had positive earnings in the past year.
In the past year ECPG had a positive cash flow from operations.
In multiple years ECPG reported negative net income over the last 5 years.
ECPG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of -1.70%, ECPG is not doing good in the industry: 85.19% of the companies in the same industry are doing better.
ECPG's Return On Equity of -9.82% is on the low side compared to the rest of the industry. ECPG is outperformed by 87.04% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.89%, ECPG is in the better half of the industry, outperforming 68.52% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ECPG is significantly below the industry average of 11.02%.
The 3 year average ROIC (5.57%) for ECPG is below the current ROIC(5.89%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.7% | ||
| ROE | -9.82% | ||
| ROIC | 5.89% |
ROA(3y)-1.01%
ROA(5y)1.79%
ROE(3y)-7.87%
ROE(5y)4.68%
ROIC(3y)5.57%
ROIC(5y)6.77%
1.3 Margins
The Operating Margin of ECPG (25.28%) is better than 83.33% of its industry peers.
In the last couple of years the Operating Margin of ECPG has declined.
Looking at the Gross Margin, with a value of 78.54%, ECPG is in the better half of the industry, outperforming 68.52% of the companies in the same industry.
In the last couple of years the Gross Margin of ECPG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.28% | ||
| PM (TTM) | N/A | ||
| GM | 78.54% |
OM growth 3Y-11.91%
OM growth 5Y-8.5%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.31%
GM growth 5Y-0.74%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ECPG is destroying value.
The number of shares outstanding for ECPG remains at a similar level compared to 1 year ago.
The number of shares outstanding for ECPG has been reduced compared to 5 years ago.
ECPG has a worse debt/assets ratio than last year.
2.2 Solvency
ECPG has an Altman-Z score of 0.93. This is a bad value and indicates that ECPG is not financially healthy and even has some risk of bankruptcy.
ECPG has a better Altman-Z score (0.93) than 64.81% of its industry peers.
The Debt to FCF ratio of ECPG is 41.30, which is on the high side as it means it would take ECPG, 41.30 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 41.30, ECPG perfoms like the industry average, outperforming 42.59% of the companies in the same industry.
A Debt/Equity ratio of 4.43 is on the high side and indicates that ECPG has dependencies on debt financing.
ECPG's Debt to Equity ratio of 4.43 is on the low side compared to the rest of the industry. ECPG is outperformed by 64.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.43 | ||
| Debt/FCF | 41.3 | ||
| Altman-Z | 0.93 |
ROIC/WACC0.82
WACC7.16%
2.3 Liquidity
ECPG has a Current Ratio of 0.97. This is a bad value and indicates that ECPG is not financially healthy enough and could expect problems in meeting its short term obligations.
ECPG has a Current ratio (0.97) which is in line with its industry peers.
A Quick Ratio of 0.97 indicates that ECPG may have some problems paying its short term obligations.
ECPG has a Quick ratio (0.97) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 |
3. Growth
3.1 Past
ECPG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 196.69%, which is quite impressive.
Measured over the past years, ECPG shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.50% on average per year.
Looking at the last year, ECPG shows a quite strong growth in Revenue. The Revenue has grown by 13.96% in the last year.
The Revenue has been decreasing by -1.19% on average over the past years.
EPS 1Y (TTM)196.69%
EPS 3Y-24.44%
EPS 5Y-3.5%
EPS Q2Q%97.62%
Revenue 1Y (TTM)13.96%
Revenue growth 3Y-2.39%
Revenue growth 5Y-1.19%
Sales Q2Q%20.45%
3.2 Future
Based on estimates for the next years, ECPG will show a very strong growth in Earnings Per Share. The EPS will grow by 29.19% on average per year.
The Revenue is expected to grow by 10.32% on average over the next years. This is quite good.
EPS Next Y63.49%
EPS Next 2Y29.19%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year13.5%
Revenue Next 2Y10.32%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
ECPG is valuated cheaply with a Price/Earnings ratio of 5.83.
79.63% of the companies in the same industry are more expensive than ECPG, based on the Price/Earnings ratio.
ECPG is valuated cheaply when we compare the Price/Earnings ratio to 27.13, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 5.04 indicates a rather cheap valuation of ECPG.
Based on the Price/Forward Earnings ratio, ECPG is valued cheaply inside the industry as 85.19% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.76, ECPG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.83 | ||
| Fwd PE | 5.04 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ECPG is valued a bit cheaper than the industry average as 68.52% of the companies are valued more expensively.
ECPG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.03 | ||
| EV/EBITDA | 11.8 |
4.3 Compensation for Growth
ECPG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ECPG's earnings are expected to grow with 29.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.09
PEG (5Y)N/A
EPS Next 2Y29.19%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for ECPG!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
41.84
+0.42 (+1.01%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners111.47%
Inst Owner Change-2.3%
Ins Owners2.99%
Ins Owner Change9.1%
Market Cap962.74M
Analysts81.82
Price Target58.4 (39.58%)
Short Float %6.26%
Short Ratio5.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)64.01%
Min EPS beat(2)55.86%
Max EPS beat(2)72.16%
EPS beat(4)2
Avg EPS beat(4)27.05%
Min EPS beat(4)-16.57%
Max EPS beat(4)72.16%
EPS beat(8)2
Avg EPS beat(8)-12.17%
EPS beat(12)2
Avg EPS beat(12)-41.06%
EPS beat(16)6
Avg EPS beat(16)-14.2%
Revenue beat(2)2
Avg Revenue beat(2)7.94%
Min Revenue beat(2)2.83%
Max Revenue beat(2)13.05%
Revenue beat(4)2
Avg Revenue beat(4)-3.7%
Min Revenue beat(4)-30.44%
Max Revenue beat(4)13.05%
Revenue beat(8)2
Avg Revenue beat(8)-7.27%
Revenue beat(12)2
Avg Revenue beat(12)-6.11%
Revenue beat(16)2
Avg Revenue beat(16)-6.4%
PT rev (1m)0%
PT rev (3m)-4.18%
EPS NQ rev (1m)8.52%
EPS NQ rev (3m)-31.38%
EPS NY rev (1m)19.22%
EPS NY rev (3m)19.22%
Revenue NQ rev (1m)3.12%
Revenue NQ rev (3m)-3.16%
Revenue NY rev (1m)2.87%
Revenue NY rev (3m)2.87%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.83 | ||
| Fwd PE | 5.04 | ||
| P/S | 0.66 | ||
| P/FCF | 10.03 | ||
| P/OCF | 7.76 | ||
| P/B | 1.07 | ||
| P/tB | 2.73 | ||
| EV/EBITDA | 11.8 |
EPS(TTM)7.18
EY17.16%
EPS(NY)8.3
Fwd EY19.83%
FCF(TTM)4.17
FCFY9.97%
OCF(TTM)5.39
OCFY12.88%
SpS63.78
BVpS38.94
TBVpS15.34
PEG (NY)0.09
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -1.7% | ||
| ROE | -9.82% | ||
| ROCE | 7.46% | ||
| ROIC | 5.89% | ||
| ROICexc | 6.1% | ||
| ROICexgc | 7.05% | ||
| OM | 25.28% | ||
| PM (TTM) | N/A | ||
| GM | 78.54% | ||
| FCFM | 6.54% |
ROA(3y)-1.01%
ROA(5y)1.79%
ROE(3y)-7.87%
ROE(5y)4.68%
ROIC(3y)5.57%
ROIC(5y)6.77%
ROICexc(3y)5.79%
ROICexc(5y)7.05%
ROICexgc(3y)7.27%
ROICexgc(5y)9.12%
ROCE(3y)7.06%
ROCE(5y)8.57%
ROICexcg growth 3Y-19.13%
ROICexcg growth 5Y-10.9%
ROICexc growth 3Y-15.25%
ROICexc growth 5Y-9.12%
OM growth 3Y-11.91%
OM growth 5Y-8.5%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.31%
GM growth 5Y-0.74%
F-Score4
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.43 | ||
| Debt/FCF | 41.3 | ||
| Debt/EBITDA | 9.84 | ||
| Cap/Depr | 87.5% | ||
| Cap/Sales | 1.91% | ||
| Interest Coverage | 1.41 | ||
| Cash Conversion | 30.77% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.97 | ||
| Altman-Z | 0.93 |
F-Score4
WACC7.16%
ROIC/WACC0.82
Cap/Depr(3y)74.6%
Cap/Depr(5y)74.26%
Cap/Sales(3y)2.37%
Cap/Sales(5y)2.35%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)196.69%
EPS 3Y-24.44%
EPS 5Y-3.5%
EPS Q2Q%97.62%
EPS Next Y63.49%
EPS Next 2Y29.19%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)13.96%
Revenue growth 3Y-2.39%
Revenue growth 5Y-1.19%
Sales Q2Q%20.45%
Revenue Next Year13.5%
Revenue Next 2Y10.32%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y12.31%
EBIT growth 3Y-14.02%
EBIT growth 5Y-9.59%
EBIT Next Year26.89%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-31.43%
FCF growth 3Y-22.2%
FCF growth 5Y-9.14%
OCF growth 1Y-29.06%
OCF growth 3Y-19.86%
OCF growth 5Y-8.61%