Encore Capital Group Inc (ECPG) stock analysis
Close on Nov 11, 2026Market cap $2.38BP/E 7.2Yield –
StockData Score
Prices as of Nov 11, 2026How the score works
Mixed10 of 30 checks passed
Encore Capital passes 10 of the 30 checks behind our score; 14 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 5/6
- Growth
- 2/6
- Past performance
- 3/6
- Financial health
- 0/6
- Dividend
- 0/6
What stands out
Margin of safety over 20%
The price is 24.7% below fair value, more than the 20% cushion we look for.
Trading below fair value
The share price of $112.35 is below our fair value estimate of $149.18.
Earnings grew over 5 years
Net income grew 3.9% a year on average over the last five fiscal years.
EPS growing 10%+ a year
Diluted EPS grew 13.5% a year over the last three fiscal years.
What to watch
Revenue growing under 10% a year
Revenue grew 8.1% a year over the last three fiscal years, short of the 10% we look for.
Interest not well covered
Operating income covers interest expense 2.6 times; we look for at least 5.
Elevated bankruptcy risk
The Altman Z-score is 1.41; above 3 is the safe zone and below 1.8 the distress zone.
P/E above its 5-year median
Encore Capital's P/E of 7.2 is above its own 5-year median of 6.2.
Valuation5/6
P/E above its 5-year median
Encore Capital's P/E of 7.2 is above its own 5-year median of 6.2.
P/E below the industry
Encore Capital's P/E of 7.2 is below the Non-depository Credit Institutions median of 8.6.
EV/EBITDA below its 5-year median
Encore Capital's EV/EBITDA of 2.8 is below its 5-year median of 3.2.
P/S below the industry
Encore Capital's price-to-sales of 1.20 is below the Non-depository Credit Institutions median of 2.22 (book value is negative, so we use sales).
Trading below fair value
The share price of $112.35 is below our fair value estimate of $149.18.
Margin of safety over 20%
The price is 24.7% below fair value, more than the 20% cushion we look for.
Growth2/6
Revenue growing under 10% a year
Revenue grew 8.1% a year over the last three fiscal years, short of the 10% we look for.
EPS growing 10%+ a year
Diluted EPS grew 13.5% a year over the last three fiscal years.
Earnings acceleration
Needs positive net income now, a year ago and five years ago.
Growing faster than the industry
Revenue grew 27.2% over the last twelve months; the Non-depository Credit Institutions median is 19.6%.
Guidance lowered
Encore Capital lowered its 2026 portfolio purchasing outlook on Aug 5, 2026.
Gross margin trend
This company does not report gross profit.
Past performance3/6
Return on equity
Needs positive equity and five years of results.
Return on invested capital
Needs operating income and invested capital.
Return on equity against the industry
Needs positive equity.
Earnings grew over 5 years
Net income grew 3.9% a year on average over the last five fiscal years.
Net margin above its 5-year average
Net margin was 17.7% over the last twelve months, against a 5-year average of 4.5%.
Net margin above the industry
Encore Capital's net margin of 17.7% is above the Non-depository Credit Institutions median of 12.7%.
Financial health0/6
Debt level
Needs debt and equity figures.
Debt trend
Needs a balance sheet from five years ago with positive equity.
Debt coverage
Needs operating cash flow.
Interest not well covered
Operating income covers interest expense 2.6 times; we look for at least 5.
Short-term liquidity
The balance sheet is not split into current and non-current items.
Elevated bankruptcy risk
The Altman Z-score is 1.41; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
Encore Capital has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itOur estimate per share
$149.18
The share price is 25% below this estimate.
| Method | Multiple used | Own 5Y median | Industry median | Value per share | Weight |
|---|---|---|---|---|---|
| P/E | 7.4× | 6.2× | 8.6× | $115.38 | 44% |
| EV/EBITDA | 5.7× | 3.2× | 8.2× | $223.39 | 39% |
| Earnings power | 9.1% cost of equity | – | – | $66.17 | 17% |
| Fair value | $149.18 | 100% | |||
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/E at month end
- Own 5-year median 6.2
- Non-depository Credit Institutions median 8.6
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Low risk
- Average value traded per day
- $25.90M
- Value traded per 1% price move
- $14.61M
Downside
Low risk
- Typical loss in a bad month
- 5.2%
- Volatility (annualized)
- 43%
- Sharpe ratio, 1 year
- 2.86
- Beta to the S&P 500 (5Y)
- 0.84
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2011 to 2025
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | +34.4% | +8.1% | +3.3% | +4.6% | |
| Operating income | +298.3% | +10.7% | +3.3% | +8.3% | |
| Net income | – | +9.7% | +3.9% | +19.0% | |
| EPS, diluted | – | +13.5% | +10.3% | +20.5% | |
| Free cash flow | -0.2% | -9.9% | -14.5% | +3.8% |
Returns and balance sheet
10 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2016 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | 13.3% | 18.9% | – | |
| Return on assets | 2.0% | 4.3% | 5.1% | |
| Debt to equity | 5.12 | 2.77 | – | |
| Net debt to EBITDA | 9.82× | 5.53× | 5.91× | |
| Interest coverage | 1.2× | 2.5× | 2.1× | |
| Capex to revenue | 2.8% | 2.3% | 1.5% | |
| Diluted shares | 26M | 32M | 24M |
Where the cash went
Fiscal 2021 to 2025, five years combined
Encore Capital generated $976.09M from operations and spent $718.69M on capital expenditure, dividends and share buybacks. 21% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2023 | -16.9% | 0.27× | 4.32× | -19.5% |
| FY2022 | 13.9% | 0.31× | 3.85× | 16.5% |
| FY2021 | 21.7% | 0.34× | 3.94× | 29.2% |
| FY2020 | 14.1% | 0.31× | 4.36× | 18.9% |
| FY2019 | 11.9% | 0.29× | 5.19× | 18.2% |
| FY2018 | 8.8% | 0.29× | 6.52× | 16.6% |
| FY2017 | 7.3% | 0.28× | 7.15× | 14.6% |
| FY2016 | 6.9% | 0.28× | 6.79× | 13.3% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero$256.83M
- Cash generatingOperating cash flow above zero$153.20M
- Return on assets improvedROA up on the prior year-3.0% → 5.4%
- Earnings backed by cashOperating cash flow above net income$153.20M vs $256.83M
- Less leverageLong-term debt to assets fell77.5% → 75.5%
- Better liquidityCurrent ratio rose– → –
- No dilutionShare count did not rise24M → 24M
- Gross margin improvedGross margin up on the prior year– → –
- More efficientAsset turnover rose0.28 → 0.37
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