Encore Capital (ECPG) AI Stock Analysis

• Market Cap: $995.26M
• Dividend Yield: N/A
• Average Volume (3M): 320.48K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.95
• Revenue Growth: 17.57%
• EPS Growth: 55.46%
• Country: US
• Employees: 7,350
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Mortgages
• EPS (TTM): 2.49
• Shares Outstanding: 23,011,772
• 10 Day Avg. Volume: 301,060
• 30 Day Avg. Volume: 320,476
• 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: 4.73
• Enterprise Value/Revenue: 3.21
• Enterprise Value/Gross Profit: 4.71
• Enterprise Value/Ebitda: 46.77
• 1Y Price Target: $57.67
• Price Target Upside: 33.34% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 56 Neutral
• Price Target: $43.00 ▼(-0.58% Downside)

Encore Capital's overall stock score is driven by a positive earnings call that highlights strong performance and improved guidance. However, significant financial challenges, including negative profitability and high leverage, weigh heavily on the score. Technical analysis and valuation further reflect a cautious outlook, with mixed signals and a negative P/E ratio.

Positive Factors

Record Portfolio Purchases

The significant increase in portfolio purchases indicates strong market demand and enhances Encore's potential for future revenue growth through increased debt recovery opportunities.

Improved Leverage and Liquidity

Improved leverage and enhanced liquidity position provide Encore with greater financial flexibility to invest in growth opportunities and manage debt obligations effectively.

Positive Guidance and Outlook

The upward revision in global collections guidance reflects management's confidence in operational execution and market conditions, supporting long-term revenue growth prospects.

Negative Factors

High Leverage

High leverage can constrain financial flexibility and increase risk, particularly in adverse economic conditions, potentially impacting long-term sustainability.

Negative Profitability

Sustained negative profitability indicates operational inefficiencies and challenges in achieving cost-effective revenue generation, which may hinder long-term financial health.

Higher Interest Expenses

Rising interest expenses due to higher debt balances can erode net income and reduce cash available for reinvestment, impacting long-term growth potential.

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 faces significant financial challenges with declining revenues, negative profitability, and high leverage. Despite maintaining positive operating cash flow, the high debt levels and negative net income indicate financial instability.

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: 43.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 43.25 is above the 20-day moving average (MA) of 42.85, above the 50-day MA of 43.02, and above the 200-day MA of 40.22, indicating a bullish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 51.85 is Neutral, neither overbought nor oversold. The STOCH value of 28.56 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	―	$6.59B	13.66	12.55%	0.99%	25.42%	190.85%
Sector *	―	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
COOP	―	―	―	―	―	2.27%	-17.46%
ECPG	―	$995.26M	-11.54	-9.46%	―	17.57%	55.46%
WD	―	$2.72B	24.65	6.26%	3.33%	11.18%	24.94%
LDI	―	$999.40M	―	-23.67%	―	6.60%	44.77%
GHLD	―	$1.24B	51.08	2.12%	―	34.62%	-7.94%

Encore Capital Corporate Events

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.

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.