Encore Capital Group, Inc.
Encore Capital Group, Inc. Fundamental Analysis
Encore Capital Group, Inc. (ECPG) shows strong financial fundamentals with a PE ratio of 6.09, profit margin of 14.52%, and ROE of 28.19%. The company generates $1.8B in annual revenue with strong year-over-year growth of 34.37%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 69.4/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze ECPG's fundamental strength across five key dimensions:
Efficiency Score
WeakECPG struggles to generate sufficient returns from assets.
Valuation Score
ExcellentECPG trades at attractive valuation levels.
Growth Score
ModerateECPG shows steady but slowing expansion.
Financial Health Score
ModerateECPG shows balanced financial health with some risks.
Profitability Score
ModerateECPG maintains healthy but balanced margins.
Key Financial Metrics
Is ECPG Expensive or Cheap?
P/E Ratio
ECPG trades at 6.09 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, ECPG's PEG of 0.01 indicates potential undervaluation.
Price to Book
The market values Encore Capital Group, Inc. at 1.60 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -3.71 times EBITDA. This is generally considered low.
How Well Does ECPG Make Money?
Net Profit Margin
For every $100 in sales, Encore Capital Group, Inc. keeps $14.52 as profit after all expenses.
Operating Margin
Core operations generate 35.43 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $28.19 in profit for every $100 of shareholder equity.
ROA
Encore Capital Group, Inc. generates $4.81 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Encore Capital Group, Inc. generates limited operating cash flow of $152.91M, signaling weaker underlying cash strength.
Free Cash Flow
Encore Capital Group, Inc. produces free cash flow of $126.69M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $5.68 in free cash annually.
FCF Yield
ECPG converts 8.11% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
6.09
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.008
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.60
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.88
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
4.23
vs 25 benchmark
Current Ratio
Current assets to current liabilities
14106.90
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.28
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.12
vs 25 benchmark
How ECPG Stacks Against Its Sector Peers
| Metric | ECPG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 6.09 | 18.91 | Better (Cheaper) |
| ROE | 28.19% | 788.00% | Weak |
| Net Margin | 14.52% | 2164.00% | Weak |
| Debt/Equity | 4.23 | 0.82 | Weak (High Leverage) |
| Current Ratio | 14106.90 | 616.06 | Strong Liquidity |
| ROA | 4.81% | -23806.00% (disorted) | Weak |
ECPG outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Encore Capital Group, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
59.35%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
63.99%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
-33.77%
Industry Style: Value, Dividend, Cyclical
Declining