We assign a fundamental rating of 3 out of 10 to ECPG. ECPG was compared to 53 industry peers in the Consumer Finance industry. While ECPG is still in line with the averages on profitability rating, there are concerns on its financial health. ECPG is valued quite cheap, but it does not seem to be growing.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

ECPG had positive earnings in the past year.
In the past year ECPG had a positive cash flow from operations.
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

Looking at the Return On Assets, with a value of -0.86%, ECPG is doing worse than 88.68% of the companies in the same industry.
ECPG has a Return On Equity of -4.74%. This is amonst the worse of the industry: ECPG underperforms 86.79% of its industry peers.
ECPG has a better Return On Invested Capital (6.93%) than 66.04% of its industry peers.
The Average Return On Invested Capital over the past 3 years for ECPG is significantly below the industry average of 12.42%.
The 3 year average ROIC (5.57%) for ECPG is below the current ROIC(6.93%), indicating increased profibility in the last year.

		Industry Rank	Sector Rank
ROA	-0.86%
ROE	-4.74%
ROIC	6.93%

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

ECPG has a better Operating Margin (28.07%) than 75.47% of its industry peers.
ECPG's Operating Margin has declined in the last couple of years.
With a decent Gross Margin value of 79.06%, ECPG is doing good in the industry, outperforming 69.81% of the companies in the same industry.
ECPG's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	28.07%
PM (TTM)	N/A
GM	79.06%

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%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ECPG is destroying value.
The number of shares outstanding for ECPG has been increased compared to 1 year ago.
Compared to 5 years ago, ECPG has less shares outstanding
ECPG has a worse debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 1.03, we must say that ECPG is in the distress zone and has some risk of bankruptcy.
ECPG's Altman-Z score of 1.03 is fine compared to the rest of the industry. ECPG outperforms 66.04% of its industry peers.
The Debt to FCF ratio of ECPG is 29.98, which is on the high side as it means it would take ECPG, 29.98 years of fcf income to pay off all of its debts.
ECPG has a Debt to FCF ratio (29.98) which is comparable to the rest of the industry.
ECPG has a Debt/Equity ratio of 4.13. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 4.13, ECPG is doing worse than 62.26% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	4.13
Debt/FCF	29.98
Altman-Z	1.03

ROIC/WACC0.91

WACC7.64%

2.3 Liquidity

A Current Ratio of 0.93 indicates that ECPG may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.93, ECPG is in line with its industry, outperforming 43.40% of the companies in the same industry.
A Quick Ratio of 0.93 indicates that ECPG may have some problems paying its short term obligations.
ECPG's Quick ratio of 0.93 is in line compared to the rest of the industry. ECPG outperforms 43.40% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.93
Quick Ratio	0.93

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

ECPG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 89.38%, which is quite impressive.
The Earnings Per Share has been decreasing by -3.19% on average over the past years.
ECPG shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 17.52%.
ECPG shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.19% yearly.

EPS 1Y (TTM)89.38%

EPS 3Y-24.04%

EPS 5Y-3.19%

EPS Q2Q%151.59%

Revenue 1Y (TTM)17.52%

Revenue growth 3Y-2.39%

Revenue growth 5Y-1.19%

Sales Q2Q%25.41%

3.2 Future

Based on estimates for the next years, ECPG will show a very negative growth in Earnings Per Share. The EPS will decrease by -19.01% on average per year.
ECPG is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -22.84% yearly.

EPS Next Y97.05%

EPS Next 2Y36.89%

EPS Next 3Y-19.01%

EPS Next 5YN/A

Revenue Next Year20.73%

Revenue Next 2Y11.28%

Revenue Next 3Y-22.84%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 6.09, which indicates a rather cheap valuation of ECPG.
Compared to the rest of the industry, the Price/Earnings ratio of ECPG indicates a somewhat cheap valuation: ECPG is cheaper than 73.58% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.82. ECPG is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 5.85, which indicates a rather cheap valuation of ECPG.
83.02% of the companies in the same industry are more expensive than ECPG, based on the Price/Forward Earnings ratio.
ECPG is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	6.09
Fwd PE	5.85

4.2 Price Multiples

ECPG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ECPG is cheaper than 66.04% 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	9.4
EV/EBITDA	10.64

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 cheap valuation may be justified as ECPG's earnings are expected to decrease with -19.01% in the coming years.