Encore Capital Group Inc (ECPG)
NASDAQ:ECPG
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Encore Capital
(NASDAQ:ECPG)
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Rating:73Outperform
Price Target:
$93.00
▲(15.17% Upside)
Action:UpgradedDate:04/24/26
The score is driven mainly by improved financial momentum (profitability rebound and positive free cash flow) and a positive earnings outlook with explicit 2026 guidance. Valuation is a clear strength due to the very low P/E. The main constraints are historical volatility/quality-of-earnings questions and overbought technical readings that raise near-term risk.
Positive Factors
Cash generation / Collections
Consistent, record collections and strong operating cash flow increase durable free cash generation capacity. Higher collections convert receivable scale into repeatable cash that funds portfolio purchases, deleveraging, buybacks and reinvestment without relying on volatile external funding.
Negative Factors
Earnings quality & volatility
Material inconsistencies between EBITDA, EBIT and net income across years signal variability in accounting composition and cash conversion. Such volatility complicates forecasting of sustainable margins, increases earnings risk, and makes long-term return expectations sensitive to one‑off items and timing.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation / Collections
Consistent, record collections and strong operating cash flow increase durable free cash generation capacity. Higher collections convert receivable scale into repeatable cash that funds portfolio purchases, deleveraging, buybacks and reinvestment without relying on volatile external funding.
Read all positive factors
Encore Capital (ECPG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.80B
Dividend YieldN/A
Average Volume (3M)326.34K
Price to Earnings (P/E)4.9
Beta (1Y)0.84
Revenue Growth35.25%
EPS GrowthN/A
CountryUS
Employees7,350
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)3.37
Shares Outstanding21,410,273
10 Day Avg. Volume454,902
30 Day Avg. Volume326,342
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)1.29
Price to Sales (P/S)0.72
P/FCF Ratio9.95
Enterprise Value/Market Cap3.17
Enterprise Value/Revenue3.24
Enterprise Value/Gross Profit4.37
Enterprise Value/Ebitda8.81
Forecast
1Y Price Target
$89.33Price Target Upside10.63% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)8.99
Revenue Forecast (FY)$1.81B
Encore Capital Business Overview & Revenue Model
Company Description
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 discou...
How the Company Makes Money
Encore primarily makes money by buying charged-off consumer debt portfolios at a discount to their face value and collecting more than the purchase price over time. (1) Purchased debt collections (core model): Encore pays an upfront price to acqui...
Encore Capital Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
Overall the call conveys a strong, positive performance and outlook driven by record portfolio purchases, record collections, improved yields and improved returns and leverage. Management provided explicit forward guidance and emphasized operational and technological improvements that are driving higher collections and margins. Noted risks include higher interest expense, elevated operating and legal spending as purchases grow, headwinds and heightened competition in Cabot's U.K. market, and dependence on continued favorable U.S. market conditions. On balance, positive operational momentum, record cash generation, deleveraging and confident guidance outweigh the listed challenges.Positive Updates
Record Portfolio Purchases and U.S. Focus
Global portfolio purchases reached a record $1.4 billion in 2025, up 4% year-over-year, with 83% of purchases spent in the U.S.; MCM finished the year with a record $1.17 billion of U.S. portfolio purchases, up 18% YOY ($175 million increase).
Negative Updates
Cabot Market Headwinds and Lower Deployments vs. 2024
Cabot purchases in 2025 ($234 million) were lower than 2024 primarily because Q4 2024 included an outsized $200 million of spot purchases; the U.K. remains impacted by subdued consumer lending, low delinquencies and robust competition, limiting attractive deployment opportunities.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Portfolio Purchases and U.S. Focus
Global portfolio purchases reached a record $1.4 billion in 2025, up 4% year-over-year, with 83% of purchases spent in the U.S.; MCM finished the year with a record $1.17 billion of U.S. portfolio purchases, up 18% YOY ($175 million increase).
Read all positive updates
Company Guidance
Encore's 2026 guidance calls for global portfolio purchases of $1.4–$1.5 billion, global collections rising about 5% to $2.7 billion and EPS increasing ~10% to $12 (from $10.91 in 2025), with interest expense and other income around $300 million and an effective tax rate in the mid‑20s; the company also expects cash efficiency margin to exceed 58% and to operate within its target leverage range of 2–3x (ended 2025 at 2.4x). Management cited the 2025 operating base that underpins the outlook — portfolio purchases $1.4B, average receivable portfolios $4.1B, ERC $9.7B, collections $2.6B (MCM $1.95B; Cabot $641M), ROIC 13.7% — and noted it repurchased roughly 9% of shares (~$90M) in 2025 while not providing a specific buyback amount for 2026.Encore Capital Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
55
Neutral
Cash Flow
67
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.76B | 1.32B | 1.22B | 1.40B | 1.61B |
| Gross Profit | 1.22B | 603.56M | 571.24M | 769.70M | 927.98M |
| EBITDA | 652.54M | 174.00M | 63.35M | 510.72M | 656.27M |
| Net Income | 256.83M | -139.24M | -206.49M | 194.56M | 350.78M |
Balance Sheet | |||||
| Total Assets | 5.34B | 4.79B | 4.63B | 4.51B | 4.61B |
| Cash, Cash Equivalents and Short-Term Investments | 156.78M | 199.87M | 158.36M | 143.91M | 189.65M |
| Total Debt | 4.13B | 3.67B | 3.32B | 2.90B | 3.00B |
| Total Liabilities | 4.36B | 4.02B | 3.69B | 3.33B | 3.42B |
| Stockholders Equity | 976.75M | 767.33M | 936.54M | 1.18B | 1.19B |
Cash Flow | |||||
| Free Cash Flow | 126.93M | 127.16M | 101.28M | 134.12M | 269.68M |
| Operating Cash Flow | 153.20M | 156.17M | 152.99M | 210.68M | 303.05M |
| Investing Cash Flow | -242.59M | -440.43M | -401.94M | -130.24M | 339.90M |
| Financing Cash Flow | 44.85M | 317.77M | 268.30M | -107.44M | -655.69M |
Encore Capital Technical Analysis
Positive
80.75
Price Trends
67.57
Positive
61.07
Positive
51.66
Positive
Market Momentum
3.46
Negative
76.47
Negative
86.78
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ECPG, the sentiment is Positive. The current price of 80.75 is above the 20-day moving average (MA) of 73.47, above the 50-day MA of 67.57, and above the 200-day MA of 51.66, indicating a bullish trend. The MACD of 3.46 indicates Negative momentum. The RSI at 76.47 is Negative, neither overbought nor oversold. The STOCH value of 86.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ECPG.
Encore Capital Risk Analysis
Encore Capital disclosed 38 risk factors in its most recent earnings report. Encore Capital reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Encore Capital Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.80B | 4.92 | 28.19% | ― | 35.25% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
54 Neutral | $4.74B | 16.04 | 12.18% | 0.90% | 8.31% | 58.79% | |
48 Neutral | $1.75B | 35.14 | 3.26% | 4.42% | 9.64% | -48.44% | |
46 Neutral | $354.67M | -6.97 | -24.39% | ― | 15.92% | 43.95% |
* Financial Sector Average
ECPG
Encore Capital
84.07
49.67
144.39%
WD
Walker & Dunlop
51.49
-21.84
-29.78%
PFSI
PennyMac Financial
91.18
-5.14
-5.33%
LDI
loanDepot
1.66
0.55
49.55%
Encore Capital Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and ComplianceShareholder Meetings
Encore Capital Tightens Bylaws, Clarifies Shareholder Nomination Rules
Neutral
Mar 20, 2026
On March 18, 2026, Encore Capital Group said that director Wendy Hannam notified the company she will not stand for re-election at the 2026 annual meeting, although she will remain on the board until that date and her decision was not due to any d...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.