ENCORE CAPITAL GROUP INC (ECPG) Stock Fundamental Analysis
NASDAQ:ECPG - Nasdaq - US2925541029 - Common Stock - Currency: USD
Taking everything into account, ECPG scores 4 out of 10 in our fundamental rating. ECPG was compared to 53 industry peers in the Consumer Finance industry. ECPG has a bad profitability rating. Also its financial health evaluation is rather negative. ECPG scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
ECPG had positive earnings in the past year.
ECPG had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: ECPG reported negative net income in multiple years.
Each year in the past 5 years ECPG had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of -2.33%, ECPG is not doing good in the industry: 81.13% of the companies in the same industry are doing better.
ECPG's Return On Equity of -14.12% is on the low side compared to the rest of the industry. ECPG is outperformed by 83.02% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.38%, ECPG is in the better half of the industry, outperforming 66.04% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for ECPG is below the industry average of 10.31%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.33% | ||
| ROE | -14.12% | ||
| ROIC | 5.38% |
ROA(3y)-1.02%
ROA(5y)1.78%
ROE(3y)-7.9%
ROE(5y)4.66%
ROIC(3y)5.57%
ROIC(5y)6.77%
1.3 Margins
The Operating Margin of ECPG (23.34%) is better than 73.58% of its industry peers.
ECPG's Operating Margin has declined in the last couple of years.
The Gross Margin of ECPG (78.37%) is better than 71.70% of its industry peers.
ECPG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.34% | ||
| PM (TTM) | N/A | ||
| GM | 78.37% |
OM growth 3Y-11.86%
OM growth 5Y-8.47%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.31%
GM growth 5Y-0.74%
2. Health
2.1 Basic Checks
ECPG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ECPG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, ECPG has less shares outstanding
Compared to 1 year ago, ECPG has a worse debt to assets ratio.
2.2 Solvency
ECPG has an Altman-Z score of 0.89. This is a bad value and indicates that ECPG is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 0.89, ECPG is doing good in the industry, outperforming 64.15% of the companies in the same industry.
The Debt to FCF ratio of ECPG is 31.24, which is on the high side as it means it would take ECPG, 31.24 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of ECPG (31.24) is worse than 62.26% of its industry peers.
ECPG has a Debt/Equity ratio of 4.63. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 4.63, ECPG is doing worse than 73.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.63 | ||
| Debt/FCF | 31.24 | ||
| Altman-Z | 0.89 |
ROIC/WACC0.76
WACC7.03%
2.3 Liquidity
ECPG has a Current Ratio of 0.99. This is a bad value and indicates that ECPG is not financially healthy enough and could expect problems in meeting its short term obligations.
ECPG has a Current ratio (0.99) which is in line with its industry peers.
A Quick Ratio of 0.99 indicates that ECPG may have some problems paying its short term obligations.
ECPG has a Quick ratio (0.99) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
ECPG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 165.62%, which is quite impressive.
ECPG shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -3.50% yearly.
Looking at the last year, ECPG shows a quite strong growth in Revenue. The Revenue has grown by 9.67% in the last year.
ECPG shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.19% yearly.
EPS 1Y (TTM)165.62%
EPS 3Y-24.44%
EPS 5Y-3.5%
EPS Q2Q%103.16%
Revenue 1Y (TTM)9.67%
Revenue growth 3Y-2.39%
Revenue growth 5Y-1.19%
Sales Q2Q%19.61%
3.2 Future
The Earnings Per Share is expected to grow by 31.06% on average over the next years. This is a very strong growth
Based on estimates for the next years, ECPG will show a quite strong growth in Revenue. The Revenue will grow by 9.59% on average per year.
EPS Next Y37.14%
EPS Next 2Y31.06%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year10.33%
Revenue Next 2Y9.59%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 6.34, the valuation of ECPG can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of ECPG indicates a rather cheap valuation: ECPG is cheaper than 81.13% of the companies listed in the same industry.
ECPG's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.19.
With a Price/Forward Earnings ratio of 4.42, the valuation of ECPG can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ECPG indicates a rather cheap valuation: ECPG is cheaper than 88.68% of the companies listed in the same industry.
ECPG is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.33, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.34 | ||
| Fwd PE | 4.42 |
4.2 Price Multiples
ECPG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ECPG is cheaper than 64.15% of the companies in the same industry.
ECPG's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.26 | ||
| EV/EBITDA | 12.71 |
4.3 Compensation for Growth
ECPG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as ECPG's earnings are expected to grow with 31.06% in the coming years.
PEG (NY)0.17
PEG (5Y)N/A
EPS Next 2Y31.06%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for ECPG!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
37.74
-0.71 (-1.85%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners112.03%
Inst Owner Change0%
Ins Owners2.85%
Ins Owner Change9.1%
Market Cap881.23M
Analysts81.82
Price Target58.4 (54.74%)
Short Float %6.18%
Short Ratio4.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)26.31%
Min EPS beat(2)-3.25%
Max EPS beat(2)55.86%
EPS beat(4)1
Avg EPS beat(4)4.87%
Min EPS beat(4)-16.57%
Max EPS beat(4)55.86%
EPS beat(8)1
Avg EPS beat(8)-23.14%
EPS beat(12)2
Avg EPS beat(12)-46.16%
EPS beat(16)6
Avg EPS beat(16)-15.18%
Revenue beat(2)1
Avg Revenue beat(2)-13.81%
Min Revenue beat(2)-30.44%
Max Revenue beat(2)2.83%
Revenue beat(4)1
Avg Revenue beat(4)-7.02%
Min Revenue beat(4)-30.44%
Max Revenue beat(4)2.83%
Revenue beat(8)1
Avg Revenue beat(8)-9.33%
Revenue beat(12)1
Avg Revenue beat(12)-7.64%
Revenue beat(16)1
Avg Revenue beat(16)-7.54%
PT rev (1m)0%
PT rev (3m)-4.18%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.16%
EPS NY rev (1m)0%
EPS NY rev (3m)12.72%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.9%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.34 | ||
| Fwd PE | 4.42 | ||
| P/S | 0.64 | ||
| P/FCF | 7.26 | ||
| P/OCF | 5.86 | ||
| P/B | 1.08 | ||
| P/tB | 2.94 | ||
| EV/EBITDA | 12.71 |
EPS(TTM)5.95
EY15.77%
EPS(NY)8.54
Fwd EY22.62%
FCF(TTM)5.2
FCFY13.77%
OCF(TTM)6.44
OCFY17.07%
SpS59.13
BVpS35.08
TBVpS12.83
PEG (NY)0.17
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -2.33% | ||
| ROE | -14.12% | ||
| ROCE | 6.8% | ||
| ROIC | 5.38% | ||
| ROICexc | 5.6% | ||
| ROICexgc | 6.5% | ||
| OM | 23.34% | ||
| PM (TTM) | N/A | ||
| GM | 78.37% | ||
| FCFM | 8.79% |
ROA(3y)-1.02%
ROA(5y)1.78%
ROE(3y)-7.9%
ROE(5y)4.66%
ROIC(3y)5.57%
ROIC(5y)6.77%
ROICexc(3y)5.79%
ROICexc(5y)7.05%
ROICexgc(3y)7.27%
ROICexgc(5y)9.12%
ROCE(3y)7.06%
ROCE(5y)8.57%
ROICexcg growth 3Y-19.09%
ROICexcg growth 5Y-10.87%
ROICexc growth 3Y-15.2%
ROICexc growth 5Y-9.09%
OM growth 3Y-11.86%
OM growth 5Y-8.47%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.31%
GM growth 5Y-0.74%
F-Score4
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.63 | ||
| Debt/FCF | 31.24 | ||
| Debt/EBITDA | 10.7 | ||
| Cap/Depr | 91.25% | ||
| Cap/Sales | 2.11% | ||
| Interest Coverage | 1.57 | ||
| Cash Conversion | 42.49% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 0.89 |
F-Score4
WACC7.03%
ROIC/WACC0.76
Cap/Depr(3y)74.18%
Cap/Depr(5y)74.01%
Cap/Sales(3y)2.36%
Cap/Sales(5y)2.35%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)165.62%
EPS 3Y-24.44%
EPS 5Y-3.5%
EPS Q2Q%103.16%
EPS Next Y37.14%
EPS Next 2Y31.06%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)9.67%
Revenue growth 3Y-2.39%
Revenue growth 5Y-1.19%
Sales Q2Q%19.61%
Revenue Next Year10.33%
Revenue Next 2Y9.59%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y0.72%
EBIT growth 3Y-13.97%
EBIT growth 5Y-9.56%
EBIT Next Year26.89%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-22.77%
FCF growth 3Y-22.17%
FCF growth 5Y-9.12%
OCF growth 1Y-21.67%
OCF growth 3Y-19.83%
OCF growth 5Y-8.59%