ENCORE CAPITAL GROUP INC (ECPG) Stock Fundamental Analysis
NASDAQ:ECPG - Nasdaq - US2925541029 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to ECPG. ECPG was compared to 53 industry peers in the Consumer Finance industry. Both the profitability and financial health of ECPG have multiple concerns. 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.
ECPG had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: ECPG reported negative net income in multiple years.
Each year in the past 5 years ECPG had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of -2.91%, ECPG is not doing good in the industry: 83.02% of the companies in the same industry are doing better.
ECPG has a Return On Equity of -18.15%. This is amonst the worse of the industry: ECPG underperforms 84.91% of its industry peers.
ECPG has a better Return On Invested Capital (5.01%) than 66.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ECPG is below the industry average of 8.61%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.91% | ||
| ROE | -18.15% | ||
| ROIC | 5.01% |
ROA(3y)-1.02%
ROA(5y)1.78%
ROE(3y)-7.9%
ROE(5y)4.66%
ROIC(3y)5.57%
ROIC(5y)6.77%
1.3 Margins
The Operating Margin of ECPG (21.95%) is better than 71.70% of its industry peers.
In the last couple of years the Operating Margin of ECPG has declined.
ECPG has a Gross Margin of 77.98%. This is in the better half of the industry: ECPG outperforms 73.58% of its industry peers.
ECPG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.95% | ||
| PM (TTM) | N/A | ||
| GM | 77.98% |
OM growth 3Y-11.86%
OM growth 5Y-8.47%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.31%
GM growth 5Y-0.74%
2. Health
2.1 Basic Checks
ECPG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for ECPG has been increased compared to 1 year ago.
Compared to 5 years ago, ECPG has less shares outstanding
ECPG has a worse debt/assets ratio than last year.
2.2 Solvency
ECPG has an Altman-Z score of 0.85. This is a bad value and indicates that ECPG is not financially healthy and even has some risk of bankruptcy.
ECPG has a Altman-Z score (0.85) which is in line with its industry peers.
ECPG has a debt to FCF ratio of 28.88. This is a negative value and a sign of low solvency as ECPG would need 28.88 years to pay back of all of its debts.
ECPG has a Debt to FCF ratio of 28.88. This is in the lower half of the industry: ECPG underperforms 64.15% of its industry peers.
ECPG has a Debt/Equity ratio of 4.79. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 4.79, ECPG is doing worse than 75.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.79 | ||
| Debt/FCF | 28.88 | ||
| Altman-Z | 0.85 |
ROIC/WACC0.75
WACC6.67%
2.3 Liquidity
A Current Ratio of 1.01 indicates that ECPG should not have too much problems paying its short term obligations.
ECPG's Current ratio of 1.01 is in line compared to the rest of the industry. ECPG outperforms 50.94% of its industry peers.
A Quick Ratio of 1.01 indicates that ECPG should not have too much problems paying its short term obligations.
The Quick ratio of ECPG (1.01) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 1.01 |
3. Growth
3.1 Past
ECPG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 143.63%, 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 small growth in Revenue. The Revenue has grown by 5.08% in the last year.
ECPG shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.19% yearly.
EPS 1Y (TTM)143.63%
EPS 3Y-24.44%
EPS 5Y-3.5%
EPS Q2Q%358.62%
Revenue 1Y (TTM)5.08%
Revenue growth 3Y-2.39%
Revenue growth 5Y-1.19%
Sales Q2Q%-4.24%
3.2 Future
ECPG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 30.86% yearly.
Based on estimates for the next years, ECPG will show a quite strong growth in Revenue. The Revenue will grow by 10.19% on average per year.
EPS Next Y21.66%
EPS Next 2Y30.86%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year10.26%
Revenue Next 2Y10.19%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 6.10, the valuation of ECPG can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of ECPG indicates a somewhat cheap valuation: ECPG is cheaper than 77.36% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ECPG to the average of the S&P500 Index (28.29), we can say ECPG is valued rather cheaply.
The Price/Forward Earnings ratio is 5.01, which indicates a rather cheap valuation of ECPG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ECPG indicates a rather cheap valuation: ECPG is cheaper than 86.79% of the companies listed in the same industry.
ECPG is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.32, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.1 | ||
| Fwd PE | 5.01 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, ECPG is valued a bit cheaper than the industry average as 69.81% of the companies are valued more expensively.
ECPG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.65 | ||
| EV/EBITDA | 13.05 |
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.
A more expensive valuation may be justified as ECPG's earnings are expected to grow with 30.86% in the coming years.
PEG (NY)0.28
PEG (5Y)N/A
EPS Next 2Y30.86%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for ECPG!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
NASDAQ:ECPG (4/21/2025, 2:24:58 PM)
30.31
-0.1 (-0.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners114.99%
Inst Owner Change0.09%
Ins Owners2.42%
Ins Owner Change7.51%
Market Cap718.04M
Analysts81.82
Price Target60.95 (101.09%)
Short Float %6.4%
Short Ratio5.1
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)0
Avg EPS beat(2)-9.91%
Min EPS beat(2)-16.57%
Max EPS beat(2)-3.25%
EPS beat(4)0
Avg EPS beat(4)-9.41%
Min EPS beat(4)-16.57%
Max EPS beat(4)-1.25%
EPS beat(8)0
Avg EPS beat(8)-35.05%
EPS beat(12)2
Avg EPS beat(12)-33.35%
EPS beat(16)6
Avg EPS beat(16)-14.96%
Revenue beat(2)0
Avg Revenue beat(2)-15.33%
Min Revenue beat(2)-30.44%
Max Revenue beat(2)-0.23%
Revenue beat(4)0
Avg Revenue beat(4)-8.39%
Min Revenue beat(4)-30.44%
Max Revenue beat(4)-0.23%
Revenue beat(8)0
Avg Revenue beat(8)-10.33%
Revenue beat(12)0
Avg Revenue beat(12)-8.38%
Revenue beat(16)0
Avg Revenue beat(16)-7.92%
PT rev (1m)0%
PT rev (3m)-4.02%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-21.68%
EPS NY rev (1m)-20.5%
EPS NY rev (3m)-20.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.66%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.1 | ||
| Fwd PE | 5.01 | ||
| P/S | 0.55 | ||
| P/FCF | 5.65 | ||
| P/OCF | 4.6 | ||
| P/B | 0.94 | ||
| P/tB | 2.77 | ||
| EV/EBITDA | 13.05 |
EPS(TTM)4.97
EY16.4%
EPS(NY)6.05
Fwd EY19.95%
FCF(TTM)5.37
FCFY17.71%
OCF(TTM)6.59
OCFY21.75%
SpS55.57
BVpS32.39
TBVpS10.96
PEG (NY)0.28
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.91% | ||
| ROE | -18.15% | ||
| ROCE | 6.34% | ||
| ROIC | 5.01% | ||
| ROICexc | 5.24% | ||
| ROICexgc | 6.13% | ||
| OM | 21.95% | ||
| PM (TTM) | N/A | ||
| GM | 77.98% | ||
| FCFM | 9.66% |
ROA(3y)-1.02%
ROA(5y)1.78%
ROE(3y)-7.9%
ROE(5y)4.66%
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-19.09%
ROICexcg growth 5Y-10.87%
ROICexc growth 3Y-15.2%
ROICexc growth 5Y-9.09%
OM growth 3Y-11.86%
OM growth 5Y-8.47%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.31%
GM growth 5Y-0.74%
F-Score5
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.79 | ||
| Debt/FCF | 28.88 | ||
| Debt/EBITDA | 11.43 | ||
| Cap/Depr | 89.43% | ||
| Cap/Sales | 2.2% | ||
| Interest Coverage | 1.37 | ||
| Cash Conversion | 48.6% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 1.01 | ||
| Altman-Z | 0.85 |
F-Score5
WACC6.67%
ROIC/WACC0.75
Cap/Depr(3y)74.18%
Cap/Depr(5y)74.01%
Cap/Sales(3y)2.36%
Cap/Sales(5y)2.35%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)143.63%
EPS 3Y-24.44%
EPS 5Y-3.5%
EPS Q2Q%358.62%
EPS Next Y21.66%
EPS Next 2Y30.86%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)5.08%
Revenue growth 3Y-2.39%
Revenue growth 5Y-1.19%
Sales Q2Q%-4.24%
Revenue Next Year10.26%
Revenue Next 2Y10.19%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-4.83%
EBIT growth 3Y-13.97%
EBIT growth 5Y-9.56%
EBIT Next Year18.24%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-0.8%
FCF growth 3Y-22.17%
FCF growth 5Y-9.12%
OCF growth 1Y2.08%
OCF growth 3Y-19.83%
OCF growth 5Y-8.59%