Encore Capital Group Inc

Valuation Analysis

About the Company

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 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 debt servicing, such as early stage collection, business process outsourcing, and contingent collection services. In addition, the company engages in debt servicing and other portfolio management services to credit originator for non-performing loans. Further, it offers credit management services. Encore Capital Group, Inc. was incorporated in 1999 and is headquartered in San

Encore Capital Group Inc Stock at a Glance

Encore Capital Group Inc (ECPG) is currently trading at $81.34 with a market capitalization of $1.7B. The trailing P/E ratio stands at 6.33x, with a forward P/E of 6.09x. The 52-week range spans from $35.67 to $92.64; the current price is 12.2% below the yearly high. Year-over-year revenue growth stands at +21.0%. The net profit margin stands at 16%.

💰 Dividend

Encore Capital Group Inc currently does not pay a dividend. The company typically reinvests its earnings into growth initiatives and product development.

📊 Analyst Rating

3 analysts rate Encore Capital Group Inc (ECPG) on consensus: Buy. The average price target is $111.00, implying +36.46% from the current price. Analyst price targets range from $105.00 to $120.00.

Encore Capital Group Inc: The Investment Case in Detail

Encore Capital Group Inc (ECPG) operates in the Financial Services — specifically Credit Services — and is headquartered in United States. Below is a structured read of the investment case built directly from the latest fundamentals, valuation multiples, analyst positioning and smart-money flows. Each section translates raw numbers into the investment logic they imply, so you can decide whether the risk/reward fits your portfolio.

The Bull Case

Revenue is growing at a healthy 21% pace year-over-year, suggesting the business model continues to find new customers and pricing power. Earnings growth of 100% is outpacing revenue, a sign of operational leverage — fixed costs are being absorbed across a larger base. With a gross margin near 100%, the company sits in the top tier of its industry — these are the kinds of structural margins that protect earnings during downturns.

The Bear Case

The debt-to-equity ratio of 390.51% is elevated, meaning the company relies heavily on creditors — refinancing terms will become more important than operational performance in the next economic downturn.

Valuation in Context

With a PEG ratio of 0.17, the price-to-earnings multiple is actually below the company's growth rate — classic value-meets-growth territory that Peter Lynch would have called a 'GARP' opportunity. The EV/EBITDA multiple of 7.83x is below the historical equity-market average — strategic acquirers would find the cash-flow profile attractive at this level.

What to Watch Next

• The analyst consensus price target implies 36.46% upside — if the next two quarters confirm the underlying thesis, target hikes typically follow.

Investment Thesis: Strengths & Weaknesses

Technical Snapshot

Price trades above both the 50- and 200-day moving averages, with 50d above 200d — a classic bullish setup (golden-cross alignment).

Risk Profile

The data points to market-like volatility, elevated short interest (8.23%), higher leverage relative to equity.

Trading Data

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