Encore Capital Group (ECPG)
NASDAQ:ECPG
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Encore Capital
(NASDAQ:ECPG)
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Rating:69Neutral
Price Target:
$87.00
▲(7.74% Upside)
Action:Downgraded
Date:05/15/26
The score is supported by a strong earnings rebound with improving free cash flow, very low P/E valuation, and upbeat guidance. The biggest constraint is financial risk from leverage and historically volatile results, while technicals show a longer-term uptrend but some near-term weakness.
Positive Factors
Improving free cash flow
Sustained and improving free cash flow (~$166M TTM, +30.9% growth) enhances Encore’s ability to fund portfolio purchases, service debt, and opportunistically repurchase shares without relying solely on external financing. Durable cash generation supports reinvestment and balance-sheet repair over the medium term, improving operational optionality even if collections timing remains variable.
Negative Factors
High leverage
Material leverage (roughly $4B debt to ~$1B equity) amplifies operational and market risks, making earnings and cash flow swings more damaging to solvency and limiting strategic flexibility. High debt increases sensitivity to interest costs and can constrain portfolio purchasing or capital returns if collections slow or funding conditions tighten.
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Positive Factors
Negative Factors
Improving free cash flow
Sustained and improving free cash flow (~$166M TTM, +30.9% growth) enhances Encore’s ability to fund portfolio purchases, service debt, and opportunistically repurchase shares without relying solely on external financing. Durable cash generation supports reinvestment and balance-sheet repair over the medium term, improving operational optionality even if collections timing remains variable.
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Encore Capital (ECPG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.73B
Dividend YieldN/A
Average Volume (3M)389.15K
Price to Earnings (P/E)4.4
Beta (1Y)0.83
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. Volume458,109
30 Day Avg. Volume389,155
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 Cap3.20
Enterprise Value/Revenue2.99
Enterprise Value/Gross Profit4.09
Enterprise Value/Ebitda7.85
Forecast
1Y Price Target
$104.33Price Target Upside29.21% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)11.98
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: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).
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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
74
Positive
Balance Sheet
48
Neutral
Cash Flow
63
Positive
| 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 | 704.74M | 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 | 127.16M | 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
Neutral
80.75
Price Trends
76.80
Positive
67.78
Positive
56.68
Positive
Market Momentum
0.92
Positive
51.02
Neutral
20.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ECPG, the sentiment is Neutral. The current price of 80.75 is below the 20-day moving average (MA) of 82.52, above the 50-day MA of 76.80, and above the 200-day MA of 56.68, indicating a neutral trend. The MACD of 0.92 indicates Positive momentum. The RSI at 51.02 is Neutral, neither overbought nor oversold. The STOCH value of 20.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.73B | 4.42 | 30.70% | ― | 33.57% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
57 Neutral | $1.71B | 21.85 | 4.08% | 4.42% | 12.71% | -30.75% | |
56 Neutral | $4.52B | 13.84 | 12.02% | 0.90% | 24.55% | 43.82% | |
42 Neutral | $402.01M | ― | -32.25% | ― | 14.29% | 21.88% |
* Financial Sector Average
ECPG
Encore Capital
80.64
42.28
110.22%
WD
Walker & Dunlop
49.73
-15.21
-23.42%
PFSI
PennyMac Financial
87.09
-7.95
-8.37%
LDI
loanDepot
1.22
0.03
2.52%
Encore Capital Corporate Events
Business Operations and StrategyPrivate Placements and Financing
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...
Business Operations and StrategyPrivate Placements and Financing
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...
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.