ENCORE CAPITAL GROUP INC (ECPG) Stock Fundamental Analysis
NASDAQ:ECPG - Nasdaq - US2925541029 - Common Stock - Currency: USD
Overall ECPG gets a fundamental rating of 4 out of 10. We evaluated ECPG against 52 industry peers in the Consumer Finance industry. ECPG may be in some trouble as it scores bad on both profitability and health. ECPG scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year ECPG was profitable.
In the past year ECPG had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: ECPG reported negative net income in multiple years.
ECPG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ECPG's Return On Assets of -2.91% is on the low side compared to the rest of the industry. ECPG is outperformed by 82.69% of its industry peers.
Looking at the Return On Equity, with a value of -18.15%, ECPG is doing worse than 84.62% of the companies in the same industry.
ECPG has a better Return On Invested Capital (5.01%) than 65.38% of its industry peers.
ECPG had an Average Return On Invested Capital over the past 3 years of 5.57%. This is below the industry average of 9.28%.
| 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
With a decent Operating Margin value of 21.95%, ECPG is doing good in the industry, outperforming 71.15% of the companies in the same industry.
ECPG's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 77.98%, ECPG is in the better half of the industry, outperforming 71.15% 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 | 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ECPG is destroying value.
Compared to 1 year ago, ECPG has more shares outstanding
The number of shares outstanding for ECPG has been reduced compared to 5 years ago.
Compared to 1 year ago, ECPG has a worse debt to assets ratio.
2.2 Solvency
ECPG has an Altman-Z score of 0.86. This is a bad value and indicates that ECPG is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.86, ECPG is in line with its industry, outperforming 59.62% of the companies in the same industry.
The Debt to FCF ratio of ECPG is 28.88, which is on the high side as it means it would take ECPG, 28.88 years of fcf income to pay off all of its debts.
ECPG's Debt to FCF ratio of 28.88 is on the low side compared to the rest of the industry. ECPG is outperformed by 63.46% 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 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.79 | ||
| Debt/FCF | 28.88 | ||
| Altman-Z | 0.86 |
ROIC/WACC0.72
WACC6.91%
2.3 Liquidity
A Current Ratio of 1.01 indicates that ECPG should not have too much problems paying its short term obligations.
The Current ratio of ECPG (1.01) is comparable to the rest of the industry.
ECPG has a Quick Ratio of 1.01. This is a normal value and indicates that ECPG is financially healthy and should not expect problems in meeting its short term obligations.
ECPG has a Quick ratio (1.01) which 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
The Earnings Per Share has grown by an impressive 143.63% over the past year.
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.
ECPG shows a small growth in Revenue. In the last year, the Revenue has grown by 5.08%.
Measured over the past years, ECPG shows a decrease in Revenue. The Revenue has been decreasing by -1.19% on average per year.
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
Based on estimates for the next years, ECPG will show a very strong growth in Earnings Per Share. The EPS will grow by 30.86% on average per year.
ECPG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 10.19% yearly.
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
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
A Price/Earnings ratio of 7.14 indicates a rather cheap valuation of ECPG.
Compared to the rest of the industry, the Price/Earnings ratio of ECPG indicates a rather cheap valuation: ECPG is cheaper than 80.77% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of ECPG to the average of the S&P500 Index (28.10), we can say ECPG is valued rather cheaply.
ECPG is valuated cheaply with a Price/Forward Earnings ratio of 5.87.
82.69% of the companies in the same industry are more expensive than ECPG, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.74, ECPG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.14 | ||
| Fwd PE | 5.87 |
4.2 Price Multiples
ECPG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ECPG is cheaper than 69.23% of the companies in the same industry.
ECPG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.55 | ||
| EV/EBITDA | 13.4 |
4.3 Compensation for Growth
The 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 30.86% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.33
PEG (5Y)N/A
EPS Next 2Y30.86%
EPS Next 3YN/A
5. Dividend
5.1 Amount
ECPG does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
35.5
-0.15 (-0.42%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners114.99%
Inst Owner Change0.49%
Ins Owners2.42%
Ins Owner Change7.51%
Market Cap832.48M
Analysts81.82
Price Target60.95 (71.69%)
Short Float %7.49%
Short Ratio4.37
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)-7%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-21.27%
EPS NY rev (1m)0%
EPS NY rev (3m)-20.5%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.59%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.14 | ||
| Fwd PE | 5.87 | ||
| P/S | 0.63 | ||
| P/FCF | 6.55 | ||
| P/OCF | 5.33 | ||
| P/B | 1.08 | ||
| P/tB | 3.21 | ||
| EV/EBITDA | 13.4 |
EPS(TTM)4.97
EY14%
EPS(NY)6.05
Fwd EY17.03%
FCF(TTM)5.42
FCFY15.28%
OCF(TTM)6.66
OCFY18.76%
SpS56.13
BVpS32.72
TBVpS11.07
PEG (NY)0.33
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 | 0.86 |
F-Score5
WACC6.91%
ROIC/WACC0.72
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%