Encore Capital (ECPG) AI Stock Analysis

• Market Cap: $933.36M
• Dividend Yield: N/A
• Average Volume (3M): 284.80K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.03
• Revenue Growth: 17.57%
• EPS Growth: 55.46%
• Country: US
• Employees: 7,350
• Sector: Financial
• Sector Strength: 69
• Industry: Financial - Mortgages
• EPS (TTM): 2.49
• Shares Outstanding: 23,011,772
• 10 Day Avg. Volume: 296,456
• 30 Day Avg. Volume: 284,803
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 5.04
• Enterprise Value/Revenue: 3.21
• Enterprise Value/Gross Profit: 4.71
• Enterprise Value/Ebitda: 46.77
• 1Y Price Target: $53.00
• Price Target Upside: 25.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 56 Neutral
• Price Target: $41.00 ▼(-2.96% Downside)

Encore Capital's overall stock score is primarily influenced by its challenging financial performance, marked by high leverage and negative profitability. However, strong earnings call results and positive corporate events provide some optimism. Technical indicators suggest mixed momentum, and valuation remains a concern due to ongoing losses.

Positive Factors

Earnings

Encore Capital Group closed out 2024 with record collections and purchases in the fourth quarter, positioning the business as a cyclical winner.

Financial Performance

Strong full-year purchasing and collections guidance exceeded expectations, indicating robust financial performance.

Market Conditions

Management conveyed a robust purchasing environment in the U.S. market, with supply at record levels, and raised its purchasing outlook.

Negative Factors

Asset Impairment

Encore Capital Group reported a significant non-cash goodwill impairment at its European Cabot business.

Market Competition

The UK and European markets remain competitive, and pricing is not yet reflecting higher cost of capital.

One-Time Expenses

A variety of one-time expenses in the fourth quarter had a $262 million impact on results.

Encore Capital Business Overview & Revenue Model

Company Description

Encore Capital Group, Inc. (ECPG) is a leading international provider of debt recovery solutions, primarily operating in the financial services sector. The company specializes in purchasing and managing portfolios of distressed consumer debt, including credit card debt, personal loans, and other financial obligations. Encore Capital leverages advanced analytics and technology to optimize its collections process, offering comprehensive solutions that help consumers resolve their debts while maximizing recovery rates for creditors.

How the Company Makes Money

Encore Capital generates revenue primarily through the acquisition of distressed debt portfolios at a discount, which it then manages to recover the outstanding amounts owed. The company's key revenue streams include collections from charged-off consumer debts, fees from servicing third-party debt portfolios, and interest income from financing arrangements. Additionally, Encore Capital has established significant partnerships with various financial institutions and lenders, allowing it to access a diverse range of debt portfolios. The company's effective use of data analytics enhances its ability to determine the potential recovery value of debts, optimizing its purchasing strategy and collection efforts, thereby contributing to its overall profitability.

Encore Capital Financial Statement Overview

Summary

Encore Capital faces significant financial challenges marked by declining revenues, negative profitability, and high leverage. While the company has maintained positive operating cash flow, its high debt levels and negative net income signal financial instability. The company must improve operational efficiency and profitability to achieve a healthier financial standing.

Income Statement

The company's income statement reflects a challenging environment with declining revenues and profitability. Gross profit margins have been decreasing, as seen in the TTM where the gross profit margin is 66.6%, down from the previous year. Net profit margins are negative, with a net loss in both TTM and last two annual reports, indicating ongoing profitability issues. Revenue growth has been volatile, with a TTM decline from the previous annual report. EBIT and EBITDA margins have also shown a downward trend, pointing towards operational inefficiencies.

Balance Sheet

Encore Capital's balance sheet indicates a high degree of leverage with a debt-to-equity ratio of approximately 4.6 in the TTM, though it has slightly improved over time. The equity ratio stands at 16.5% in the TTM, highlighting limited equity compared to the total assets. Return on equity is negative due to ongoing net losses, suggesting inefficiencies in generating returns on shareholders' equity. Despite high leverage, stability is maintained with a consistent level of total assets.

Cash Flow

The cash flow statement shows mixed results. Operating cash flow remains positive, but free cash flow has decreased slightly in the TTM. The free cash flow to net income ratio is unreliable due to negative net income, but operating cash flow covers net income losses, indicating some operational cash generation strength. The company appears to manage its capital expenditures effectively despite pressures on net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.47B	1.32B	1.22B	1.40B	1.61B	1.50B
Gross Profit	1000.00M	893.45M	571.24M	769.70M	927.98M	834.40M
EBITDA	100.60M	308.09M	63.35M	510.72M	683.35M	579.29M
Net Income	-89.15M	-139.24M	-206.49M	194.56M	350.78M	211.85M
Balance Sheet
Total Assets	5.19B	4.79B	4.63B	4.51B	4.61B	4.86B
Cash, Cash Equivalents and Short-Term Investments	172.90M	199.87M	158.36M	143.91M	189.65M	189.18M
Total Debt	0.00	3.67B	3.32B	3.98B	3.00B	3.28B
Total Liabilities	4.30B	4.02B	3.69B	3.33B	3.42B	3.64B
Stockholders Equity	895.97M	767.33M	936.54M	1.18B	1.19B	1.22B
Cash Flow
Free Cash Flow	95.99M	127.16M	101.28M	173.46M	269.68M	278.26M
Operating Cash Flow	124.28M	156.17M	152.99M	210.68M	303.05M	312.86M
Investing Cash Flow	-478.20M	-440.43M	-401.94M	-130.24M	339.90M	82.83M
Financing Cash Flow	265.51M	317.77M	268.30M	-107.44M	-655.69M	-403.20M

Encore Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 42.25 is above the 20-day moving average (MA) of 39.35, above the 50-day MA of 39.28, and above the 200-day MA of 41.53, indicating a bullish trend. The MACD of 0.81 indicates Negative momentum. The RSI at 62.82 is Neutral, neither overbought nor oversold. The STOCH value of 69.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ECPG.

Encore Capital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VEL	68 Neutral	$722.26M	8.78	15.02%	―	35.12%	25.28%
PFSI	67 Neutral	$5.53B	14.83	10.05%	1.09%	20.77%	96.22%
Sector *	61 Neutral	C$15.82B	6.66	15.12%	5.92%	28.62%	-7.32%
WD	61 Neutral	$2.92B	26.46	6.26%	3.06%	11.18%	24.94%
GHLD	58 Neutral	$1.23B	51.03	2.12%	2.49%	34.62%	-7.94%
LDI	57 Neutral	$622.14M	―	-23.67%	―	6.60%	44.77%
ECPG	56 Neutral	$933.36M	―	-9.46%	―	17.57%	55.46%

Encore Capital Corporate Events

Encore Capital Reports Strong Q2 2025 Financial Results

On August 6, 2025, Encore Capital Group, Inc. reported strong financial results for the second quarter of 2025, with significant growth in portfolio purchases, collections, and earnings per share compared to the previous year. The company achieved record portfolio purchases and collections in the U.S., driven by robust portfolio supply and strong execution, while its European operations also delivered solid performance despite market challenges. These results highlight Encore’s strategic focus on maximizing returns and maintaining a competitive advantage in the debt purchasing market.

The most recent analyst rating on (ECPG) stock is a Buy with a $64.00 price target. To see the full list of analyst forecasts on Encore Capital stock, see the ECPG Stock Forecast page.

Encore Capital Holds Annual Stockholders Meeting

Encore Capital held its Annual Meeting of Stockholders on June 6, 2025, where all nine directors were elected. Additionally, the compensation of the company’s named executive officers was approved, and BDO USA, P.C. was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (ECPG) stock is a Buy with a $64.00 price target. To see the full list of analyst forecasts on Encore Capital stock, see the ECPG Stock Forecast page.

Encore Capital Expands Credit Facility by $190 Million

On May 22, 2025, Encore Capital Group announced an amendment to its global senior secured revolving credit facility, increasing the facility size by $190 million to $1,485 million and extending its termination date to September 2029, except for a $69.5 million tranche that remains due in September 2028. This expansion and extension of the credit facility are likely to enhance the company’s financial flexibility and support its operational and strategic initiatives, potentially impacting its industry positioning and stakeholder interests positively.

The most recent analyst rating on (ECPG) stock is a Buy with a $61.00 price target. To see the full list of analyst forecasts on Encore Capital stock, see the ECPG Stock Forecast page.