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Encore Capital
(NASDAQ:ECPG)
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Rating:73Outperform
Price Target:
$102.00
▲(13.13% Upside)
Action:Reiterated
Date:06/16/26
The score is driven by the earnings/FCF rebound and upbeat, raised 2026 guidance, supported by strong price trend and a low P/E. The key constraint is balance-sheet leverage and the company’s historical earnings/cash-flow volatility, with additional risk from regional headwinds and interest expense.
Positive Factors
Collection performance & technology
Record collections driven by U.S. execution and technology imply durable operating strength: multi-channel collections, analytics and servicing lift recovery rates across vintages, supporting recurring cash inflows and improving portfolio economics over multiple quarters.
Negative Factors
High leverage
Elevated debt levels materially constrain flexibility: high leverage increases sensitivity to slower collections and raises interest burden, limiting ability to opportunistically buy portfolios or absorb shocks without either issuing equity or materially cutting activity.
Read all positive and negative factors
Positive Factors
Negative Factors
Collection performance & technology
Record collections driven by U.S. execution and technology imply durable operating strength: multi-channel collections, analytics and servicing lift recovery rates across vintages, supporting recurring cash inflows and improving portfolio economics over multiple quarters.
Read all positive factors
Encore Capital (ECPG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.93B
Dividend YieldN/A
Average Volume (3M)342.94K
Price to Earnings (P/E)6.9
Beta (1Y)0.81
Revenue Growth33.57%
EPS GrowthN/A
CountryUS
Employees7,350
SectorFinancial
Sector Strength70
IndustryFinancial - Mortgages
Share Statistics
EPS (TTM)13.12
Shares Outstanding21,440,413
10 Day Avg. Volume340,412
30 Day Avg. Volume342,935
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$113.33Price Target Upside25.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)12.95
Revenue Forecast (FY)$1.85B
Encore Capital Business Overview & Revenue Model
Company Description
Encore Capital Group, Inc. operates as a specialized financial institution, offering global solutions for debt resolution and associated support services to individual consumers holding diverse financial assets. The company acquires portfolios of ...
How the Company Makes Money
Encore Capital primarily makes money by acquiring defaulted consumer debt portfolios at a discount to their face value and then collecting more than the purchase price over time. After buying a portfolio, the company pursues recoveries via volunta...
Encore Capital Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call communicated strong operational and financial momentum driven by record collections, improved yields and margins, robust U.S. portfolio purchasing, and upgraded guidance for 2026. Key positives include double-digit revenue and EPS growth, improved ROIC and leverage, and substantial cash generation. Balanced against this are regional headwinds in the U.K./Europe, cautious AI/regulatory considerations, concentration in the U.S. market, and modestly higher interest expense. On balance, the positives outweigh the issues, pointing to confidence in near-term growth and execution.Positive Updates
Record Collections and Strong Growth
Global collections reached a record $718 million in Q1 2026, up 19% year-over-year, and delivered 106% of the company's ERC at the end of 2025; collections strength was driven by U.S. execution, technology deployment and recent portfolio purchases.
Negative Updates
European Market Headwinds and Competition
Cabot faced subdued consumer lending, low delinquencies and robust competition in the U.K.; Cabot portfolio purchases were modest at $47 million in Q1 and collections grew only 7% YoY to $161 million (partly supported by currency tailwinds).
Read all updates
Q1-2026 Updates
Positive
Negative
Record Collections and Strong Growth
Global collections reached a record $718 million in Q1 2026, up 19% year-over-year, and delivered 106% of the company's ERC at the end of 2025; collections strength was driven by U.S. execution, technology deployment and recent portfolio purchases.
Read all positive updates
Company Guidance
Encore guided 2026 portfolio purchases of $1.4–$1.5 billion and raised collections guidance to an ~8% increase to $2.8 billion, while expecting full‑year cash efficiency margin to exceed 58%; management also forecasts 2026 EPS up ~19% to $13 per share, combined interest expense and other income of about $300 million, and an effective tax rate in the mid‑20s (Q1 was ~23%). They reiterated a target leverage range of 2–3x (Q1 leverage 2.3x), noted no material debt maturities until 2028 and an extended securitization maturity to January 2031, highlighted continued priority on portfolio purchases with opportunistic share repurchases (≈$20 million repurchased in Q1), and cited a trailing‑12‑month ROIC of 14.6%.Encore Capital Financial Statement Overview
Summary
Income Statement
Balance Sheet
Cash Flow
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.85B | 1.76B | 1.32B | 1.22B | 1.40B | 1.61B |
| Gross Profit | 1.35B | 1.22B | 603.56M | 571.24M | 769.70M | 927.98M |
| EBITDA | 702.54M | 652.54M | 174.00M | 63.35M | 510.72M | 656.27M |
| Net Income | 296.28M | 256.83M | -139.24M | -206.49M | 194.56M | 350.78M |
Balance Sheet | ||||||
| Total Assets | 5.45B | 5.34B | 4.79B | 4.63B | 4.51B | 4.61B |
| Cash, Cash Equivalents and Short-Term Investments | 227.20M | 156.78M | 199.87M | 158.36M | 143.91M | 189.65M |
| Total Debt | 4.03B | 4.13B | 3.67B | 3.32B | 2.90B | 3.00B |
| Total Liabilities | 4.42B | 4.36B | 4.02B | 3.69B | 3.33B | 3.42B |
| Stockholders Equity | 1.03B | 976.75M | 767.33M | 936.54M | 1.18B | 1.19B |
Cash Flow | ||||||
| Free Cash Flow | 166.11M | 126.93M | 126.95M | 101.28M | 134.12M | 269.68M |
| Operating Cash Flow | 190.24M | 153.20M | 156.17M | 152.99M | 210.68M | 303.05M |
| Investing Cash Flow | -169.72M | -242.59M | -440.43M | -401.94M | -130.24M | 339.90M |
| Financing Cash Flow | 23.13M | 44.85M | 317.77M | 268.30M | -107.44M | -655.69M |
Encore Capital Technical Analysis
Positive
90.16
Price Trends
85.11
Positive
80.36
Positive
66.25
Positive
Market Momentum
0.92
Positive
54.30
Neutral
37.02
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 90.16 is below the 20-day moving average (MA) of 90.43, above the 50-day MA of 85.11, and above the 200-day MA of 66.25, indicating a neutral trend. The MACD of 0.92 indicates Positive momentum. The RSI at 54.30 is Neutral, neither overbought nor oversold. The STOCH value of 37.02 is Neutral, 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 | $1.93B | 6.87 | 30.70% | ― | 33.57% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
57 Neutral | $4.38B | 8.62 | 12.02% | 1.42% | 24.55% | 43.82% | |
52 Neutral | $1.65B | 23.29 | 4.08% | 5.60% | 12.71% | -30.75% | |
42 Neutral | $341.20M | -2.91 | -32.25% | ― | 14.29% | 21.88% |
* Financial Sector Average
ECPG
Encore Capital
90.16
51.82
135.15%
WD
Walker & Dunlop
48.20
-24.54
-33.73%
PFSI
PennyMac Financial
84.35
-7.94
-8.60%
LDI
loanDepot
1.01
-0.68
-40.24%
Encore Capital Corporate Events
Business Operations and Strategy
Encore Capital announces redemption of convertible senior notes
Neutral
Jul 22, 2026
On July 22, 2026, Encore Capital Group announced it had issued a notice to redeem all $230 million of its 4.00% Convertible Senior Notes due 2029, with redemption scheduled for September 24, 2026. The redemption right was triggered after Encore...
Shareholder MeetingsBusiness Operations and StrategyRegulatory Filings and Compliance
Encore Capital Shareholders Approve Updated Incentive Plan
Positive
Jun 16, 2026
Encore Capital Group, Inc. reported the results of its June 12, 2026 annual meeting, where stockholders approved an amended and restated 2017 Incentive Award Plan that increases the share reserve and incentive stock option capacity by 650,000 shar...
Private Placements and Financing
Encore Capital Issues New Senior Secured Euro Notes
Positive
May 29, 2026
On May 28, 2026, Encore Capital Group, Inc. issued €325 million of senior secured floating rate notes due 2033, fully and unconditionally guaranteed on a senior secured basis by substantially all of its material subsidiaries. The notes share...
Private Placements and FinancingBusiness Operations and Strategy
Encore Capital Upsizes Euro Notes in Refinancing Move
Positive
May 14, 2026
On May 12 and 13, 2026, Encore Capital Group announced and then priced a private offering of senior secured floating rate notes due 2033, upsizing the deal from €300 million to €325 million, with interest set at three-month EURIBOR, su...
Private Placements and FinancingBusiness Operations and Strategy
Encore Capital Upsizes Senior Secured Notes Offering
Positive
May 12, 2026
Encore Capital Group, Inc. is a specialty finance company that operates in the consumer debt purchasing and recovery industry, focusing on acquiring and managing portfolios of defaulted consumer receivables. The company accesses capital markets re...
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.