Encore Capital (ECPG) AI Stock Analysis

• Market Cap: $945.78M
• Dividend Yield: N/A
• Average Volume (3M): 320.48K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.95
• Revenue Growth: 10.85%
• EPS Growth: 77.59%
• Country: US
• Employees: 7,350
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 3.17
• Shares Outstanding: 23,011,772
• 10 Day Avg. Volume: 301,060
• 30 Day Avg. Volume: 320,476
• PEG Ratio: 0.25
• Price to Book (P/B): 1.49
• Price to Sales (P/S): 0.87
• P/FCF Ratio: 8.97
• Enterprise Value/Market Cap: 4.97
• Enterprise Value/Revenue: 3.01
• Enterprise Value/Gross Profit: 4.53
• Enterprise Value/Ebitda: 14.02
• 1Y Price Target: $59.25
• Price Target Upside: 19.48% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: $49.00 ▼(-1.19% Downside)

Encore Capital's overall stock score is primarily influenced by its challenging financial performance, marked by high leverage and negative profitability. However, the strong earnings call results, particularly in the U.S. market, and positive technical indicators provide some optimism. The valuation remains a concern due to the negative P/E ratio and lack of dividend yield.

Positive Factors

Strong Revenue Growth

Encore Capital's significant revenue growth indicates strong market demand and effective operational strategies, enhancing long-term business sustainability.

Technological Advancements

Investment in technology and digital capabilities enhances operational efficiency and competitive edge, supporting sustained growth and market leadership.

Share Repurchase Program

The expanded share repurchase program reflects management's confidence in the company's future prospects and commitment to returning value to shareholders.

Negative Factors

High Leverage

High leverage can constrain financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Negative Profitability

Ongoing negative profitability indicates operational inefficiencies and challenges in achieving sustainable financial health, affecting long-term viability.

Increased Operating Expenses

Rising operating expenses can erode profit margins and limit the company's ability to invest in growth, necessitating improved cost management.

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 discounts to face value, as well as manages them by working with individuals as they repay their obligations and works toward financial recovery. It is also involved in the provision of early stage collection, business process outsourcing, and contingent collection services, as well as debt servicing and other portfolio management services to credit originator for non-performing loans. The company was incorporated in 1999 and is headquartered in San Diego, California.

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's financial statements present a challenging picture. While there is some revenue growth and strong gross margins, the company faces significant profitability issues with negative net income and high leverage. The cash flow situation shows improvement, but the reliance on debt and negative return on equity are major concerns. Overall, the company needs to address its profitability and leverage to improve its financial health.

Income Statement

Encore Capital's income statement shows a mixed performance. The TTM (Trailing-Twelve-Months) gross profit margin is strong at 68.14%, indicating efficient cost management. However, the net profit margin is negative at -6.07%, reflecting a net loss, which is a significant concern. Revenue growth is positive at 6.36% TTM, showing some recovery from previous declines. EBIT and EBITDA margins have decreased compared to historical performance, indicating pressure on operating profitability.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio of 4.13 TTM, which is risky and indicates potential financial instability. Return on equity is negative at -10.10% TTM, reflecting the company's inability to generate profits from shareholders' equity. The equity ratio is relatively low, suggesting a heavy reliance on debt financing.

Cash Flow

Cash flow analysis shows a positive trend with a 37.33% growth in free cash flow TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.58, suggesting that operating cash flows are not fully covering net losses. The free cash flow to net income ratio is 0.77, highlighting some efficiency in converting earnings into cash flow despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.56B	1.32B	1.22B	1.40B	1.61B	1.50B
Gross Profit	1.04B	603.56M	571.24M	769.70M	927.98M	834.40M
EBITDA	335.57M	174.00M	63.35M	510.72M	656.27M	535.03M
Net Income	-45.13M	-139.24M	-206.49M	194.56M	350.78M	211.85M
Balance Sheet
Total Assets	5.26B	4.79B	4.63B	4.51B	4.61B	4.86B
Cash, Cash Equivalents and Short-Term Investments	172.49M	199.87M	158.36M	143.91M	189.65M	189.18M
Total Debt	3.93B	3.67B	3.32B	2.90B	3.00B	3.28B
Total Liabilities	4.31B	4.02B	3.69B	3.33B	3.42B	3.64B
Stockholders Equity	952.91M	767.33M	936.54M	1.18B	1.19B	1.22B
Cash Flow
Free Cash Flow	131.83M	127.16M	101.28M	173.46M	269.68M	278.26M
Operating Cash Flow	159.93M	156.17M	152.99M	210.68M	303.05M	312.86M
Investing Cash Flow	-480.27M	-440.43M	-401.94M	-130.24M	339.90M	82.83M
Financing Cash Flow	237.84M	317.77M	268.30M	-107.44M	-655.69M	-403.20M

Encore Capital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 49.59
• 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 49.59 is above the 20-day moving average (MA) of 44.87, above the 50-day MA of 43.95, and above the 200-day MA of 40.11, indicating a bullish trend. The MACD of 1.69 indicates Negative momentum. The RSI at 65.04 is Neutral, neither overbought nor oversold. The STOCH value of 76.55 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
PFSI	71 Outperform	$6.59B	13.66	12.55%	0.99%	25.42%	190.85%
GHLD	70 Outperform	$1.24B	50.97	10.53%	―	23.81%	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
COOP	65 Neutral	―	―	―	―	2.27%	-17.46%
ECPG	57 Neutral	$945.78M	-10.97	-4.51%	―	10.85%	77.59%
WD	52 Neutral	$2.23B	19.39	6.46%	3.33%	12.08%	20.13%
LDI	43 Neutral	$849.75M	-6.92	-25.72%	―	3.91%	27.78%

Encore Capital Corporate Events

Encore Capital Group Reports Robust Q3 Growth

The recent earnings call for Encore Capital Group painted a picture of robust financial health, driven by impressive growth in collections, earnings per share, and portfolio purchases, particularly in the U.S. market. The company has leveraged new technologies and digital enhancements to fuel this growth, although challenges persist in the European markets due to subdued consumer lending and low delinquencies. Despite increased operating expenses, the overall sentiment was positive, with an expanded share repurchase program signaling confidence in future prospects.

Encore Capital Group Reports Strong Q3 2025 Results

Encore Capital Group is an international specialty finance company that provides debt recovery solutions and related services, primarily operating in the financial sector. The company is known for its Consumer Bill of Rights, which sets industry-leading commitments to consumers.

Encore Capital Reports Strong Q3 2025 Financial Growth

On November 5, 2025, Encore Capital Group, Inc. reported significant financial growth in the third quarter of 2025, with a 23% increase in portfolio purchases and a 20% rise in collections compared to the previous year. The company’s strategic focus on the U.S. market, where returns are highest, contributed to these results, and the implementation of new technologies and enhanced digital capabilities led to record collections. The company’s financial performance indicates a strong market position, with increased liquidity and no major debt maturities until 2028, which could positively impact stakeholders.

The most recent analyst rating on (ECPG) stock is a Hold with a $43.00 price target. To see the full list of analyst forecasts on Encore Capital stock, see the ECPG Stock Forecast page.

Encore Capital Issues $500M Senior Secured Notes

On October 1, 2025, Encore Capital Group issued $500 million in senior secured notes due 2031, with an interest rate of 6.625% per annum. The proceeds from this issuance were used to repay the company’s revolving credit facility and cover transaction-related expenses, impacting the company’s financial strategy by securing its debt obligations with its assets.

The most recent analyst rating on (ECPG) stock is a Hold with a $41.00 price target. To see the full list of analyst forecasts on Encore Capital stock, see the ECPG Stock Forecast page.

Encore Capital Announces $500M Senior Secured Notes Offering

On September 24, 2025, Encore Capital Group announced its intention to offer $500 million in senior secured notes due 2031, an increase from the initially planned $400 million, with an interest rate of 6.625% per annum. The proceeds are intended to repay the company’s revolving credit facility and cover transaction fees, impacting its financial operations by potentially improving liquidity and financial flexibility.

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.

Encore Capital Group Reports Strong Q2 2025 Performance

Encore Capital Group’s recent earnings call revealed a robust performance in the second quarter of 2025, marked by record portfolio purchases and collections, alongside significant earnings growth. The company showcased its success in the U.S. market, although it faced challenges in Europe and dealt with increased operating and interest expenses.

Encore Capital Group Reports Strong Q2 2025 Results

Encore Capital Group is an international specialty finance company that provides debt recovery solutions and services for consumers across various financial assets. Headquartered in San Diego, it operates globally through its subsidiaries, purchasing consumer receivables from major financial institutions and helping individuals manage their debt obligations.