ENCORE CAPITAL GROUP INC (ECPG) Stock Fundamental Analysis
NASDAQ:ECPG - Nasdaq - US2925541029 - Common Stock - Currency: USD
ECPG gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 53 industry peers in the Consumer Finance industry. ECPG has a medium profitability rating, but doesn't score so well on its financial health evaluation. ECPG has a decent growth rate and is not valued too expensively.
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.
Of the past 5 years ECPG 4 years were profitable.
ECPG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -3.70%, ECPG is doing worse than 84.62% of the companies in the same industry.
ECPG has a worse Return On Equity (-17.62%) than 80.77% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.51%, ECPG is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for ECPG is below the industry average of 7.34%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.7% | ||
| ROE | -17.62% | ||
| ROIC | 4.51% |
ROA(3y)2.49%
ROA(5y)3.05%
ROE(3y)8.01%
ROE(5y)11.57%
ROIC(3y)5.24%
ROIC(5y)5.83%
1.3 Margins
With an excellent Operating Margin value of 25.88%, ECPG belongs to the best of the industry, outperforming 84.62% of the companies in the same industry.
ECPG's Operating Margin has declined in the last couple of years.
The Gross Margin of ECPG (79.04%) is better than 73.08% of its industry peers.
ECPG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.88% | ||
| PM (TTM) | N/A | ||
| GM | 79.04% |
OM growth 3Y-14.05%
OM growth 5Y-5.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.8%
GM growth 5Y-0.67%
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.
ECPG has less shares outstanding than it did 5 years ago.
The debt/assets ratio for ECPG is higher compared to a year ago.
2.2 Solvency
ECPG has an Altman-Z score of 1.01. This is a bad value and indicates that ECPG is not financially healthy and even has some risk of bankruptcy.
ECPG has a better Altman-Z score (1.01) than 61.54% of its industry peers.
The Debt to FCF ratio of ECPG is 25.19, which is on the high side as it means it would take ECPG, 25.19 years of fcf income to pay off all of its debts.
ECPG has a worse Debt to FCF ratio (25.19) than 65.38% of its industry peers.
ECPG has a Debt/Equity ratio of 3.39. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 3.39, ECPG is doing worse than 61.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.39 | ||
| Debt/FCF | 25.19 | ||
| Altman-Z | 1.01 |
ROIC/WACC0.71
WACC6.37%
2.3 Liquidity
A Current Ratio of 1.33 indicates that ECPG should not have too much problems paying its short term obligations.
ECPG's Current ratio of 1.33 is in line compared to the rest of the industry. ECPG outperforms 51.92% of its industry peers.
ECPG has a Quick Ratio of 1.33. This is a normal value and indicates that ECPG is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.33, ECPG is in line with its industry, outperforming 51.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 706.12% over the past year.
Measured over the past years, ECPG shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -16.25% on average per year.
Looking at the last year, ECPG shows a small growth in Revenue. The Revenue has grown by 2.53% in the last year.
ECPG shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -2.14% yearly.
EPS 1Y (TTM)706.12%
EPS 3Y-35.94%
EPS 5Y-16.25%
EPS Q2Q%59.49%
Revenue 1Y (TTM)2.53%
Revenue growth 3Y-6.47%
Revenue growth 5Y-2.14%
Sales Q2Q%39.91%
3.2 Future
ECPG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 72.19% yearly.
ECPG is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 11.09% yearly.
EPS Next Y153.1%
EPS Next 2Y93.08%
EPS Next 3Y72.19%
EPS Next 5YN/A
Revenue Next Year11.52%
Revenue Next 2Y12.54%
Revenue Next 3Y11.09%
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
A Price/Earnings ratio of 16.74 indicates a correct valuation of ECPG.
Based on the Price/Earnings ratio, ECPG is valued a bit more expensive than 61.54% of the companies in the same industry.
When comparing the Price/Earnings ratio of ECPG to the average of the S&P500 Index (29.62), we can say ECPG is valued slightly cheaper.
A Price/Forward Earnings ratio of 6.54 indicates a rather cheap valuation of ECPG.
Based on the Price/Forward Earnings ratio, ECPG is valued cheaply inside the industry as 84.62% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.70, ECPG is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.74 | ||
| Fwd PE | 6.54 |
4.2 Price Multiples
75.00% of the companies in the same industry are more expensive than ECPG, based on the Enterprise Value to EBITDA ratio.
ECPG's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.36 | ||
| EV/EBITDA | 11.92 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
ECPG's earnings are expected to grow with 72.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.11
PEG (5Y)N/A
EPS Next 2Y93.08%
EPS Next 3Y72.19%
5. Dividend
5.1 Amount
ECPG does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
49.72
-0.29 (-0.58%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryConsumer Finance
Earnings (Last)
Earnings (Next)
Inst Owners114.99%
Inst Owner Change-87.03%
Ins Owners2.42%
Ins Owner Change-0.04%
Market Cap1.18B
Analysts81.82
Price Target65.54 (31.82%)
Short Float %6.13%
Short Ratio10.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
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)-5.48%
Min EPS beat(2)-16.57%
Max EPS beat(2)5.6%
EPS beat(4)1
Avg EPS beat(4)-39.61%
Min EPS beat(4)-146.23%
Max EPS beat(4)5.6%
EPS beat(8)1
Avg EPS beat(8)-70.33%
EPS beat(12)4
Avg EPS beat(12)-29.93%
EPS beat(16)7
Avg EPS beat(16)-15.88%
Revenue beat(2)1
Avg Revenue beat(2)0.21%
Min Revenue beat(2)-0.23%
Max Revenue beat(2)0.65%
Revenue beat(4)1
Avg Revenue beat(4)-5.01%
Min Revenue beat(4)-17.77%
Max Revenue beat(4)0.65%
Revenue beat(8)1
Avg Revenue beat(8)-6.64%
Revenue beat(12)1
Avg Revenue beat(12)-6.54%
Revenue beat(16)1
Avg Revenue beat(16)-6.12%
PT rev (1m)3.21%
PT rev (3m)3.21%
EPS NQ rev (1m)-0.65%
EPS NQ rev (3m)-0.65%
EPS NY rev (1m)1.81%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.74 | ||
| Fwd PE | 6.54 | ||
| P/S | 0.89 | ||
| P/FCF | 8.36 | ||
| P/OCF | 6.95 | ||
| P/B | 1.12 | ||
| P/tB | 2.8 | ||
| EV/EBITDA | 11.92 |
EPS(TTM)2.97
EY5.97%
EPS(NY)7.61
Fwd EY15.3%
FCF(TTM)5.95
FCFY11.97%
OCF(TTM)7.15
OCFY14.38%
SpS56.06
BVpS44.24
TBVpS17.73
PEG (NY)0.11
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.7% | ||
| ROE | -17.62% | ||
| ROCE | 7.2% | ||
| ROIC | 4.51% | ||
| ROICexc | 4.75% | ||
| ROICexgc | 5.77% | ||
| OM | 25.88% | ||
| PM (TTM) | N/A | ||
| GM | 79.04% | ||
| FCFM | 10.61% |
ROA(3y)2.49%
ROA(5y)3.05%
ROE(3y)8.01%
ROE(5y)11.57%
ROIC(3y)5.24%
ROIC(5y)5.83%
ROICexc(3y)5.45%
ROICexc(5y)6.08%
ROICexgc(3y)7.16%
ROICexgc(5y)7.96%
ROCE(3y)8.37%
ROCE(5y)9.32%
ROICexcg growth 3Y-20.41%
ROICexcg growth 5Y-8.75%
ROICexc growth 3Y-18.55%
ROICexc growth 5Y-7.63%
OM growth 3Y-14.05%
OM growth 5Y-5.55%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.8%
GM growth 5Y-0.67%
F-Score3
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.39 | ||
| Debt/FCF | 25.19 | ||
| Debt/EBITDA | 9.44 | ||
| Cap/Depr | 87.82% | ||
| Cap/Sales | 2.14% | ||
| Interest Coverage | 1.88 | ||
| Cash Conversion | 45.05% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.33 | ||
| Altman-Z | 1.01 |
F-Score3
WACC6.37%
ROIC/WACC0.71
Cap/Depr(3y)66.59%
Cap/Depr(5y)75.44%
Cap/Sales(3y)2.41%
Cap/Sales(5y)2.48%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)706.12%
EPS 3Y-35.94%
EPS 5Y-16.25%
EPS Q2Q%59.49%
EPS Next Y153.1%
EPS Next 2Y93.08%
EPS Next 3Y72.19%
EPS Next 5YN/A
Revenue 1Y (TTM)2.53%
Revenue growth 3Y-6.47%
Revenue growth 5Y-2.14%
Sales Q2Q%39.91%
Revenue Next Year11.52%
Revenue Next 2Y12.54%
Revenue Next 3Y11.09%
Revenue Next 5YN/A
EBIT growth 1Y-1.13%
EBIT growth 3Y-19.61%
EBIT growth 5Y-7.57%
EBIT Next Year34.38%
EBIT Next 3Y25.75%
EBIT Next 5YN/A
FCF growth 1Y-34.65%
FCF growth 3Y-22.77%
FCF growth 5Y1.45%
OCF growth 1Y-31.13%
OCF growth 3Y-21.22%
OCF growth 5Y-3.91%