ECPG gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 54 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

In the past year ECPG was profitable.
In the past year ECPG had a positive cash flow from operations.
In multiple years ECPG reported negative net income over the last 5 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 87.04% of the companies in the same industry.
Looking at the Return On Equity, with a value of -4.74%, ECPG is doing worse than 85.19% of the companies in the same industry.
ECPG's Return On Invested Capital of 6.93% is fine compared to the rest of the industry. ECPG outperforms 66.67% 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's Operating Margin of 28.07% is fine compared to the rest of the industry. ECPG outperforms 75.93% of its industry peers.
In the last couple of years the Operating Margin of ECPG has declined.
ECPG has a Gross Margin of 79.06%. This is in the better half of the industry: ECPG outperforms 70.37% of its industry peers.
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

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

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 64.81% of its industry peers.
ECPG has a debt to FCF ratio of 29.98. This is a negative value and a sign of low solvency as ECPG would need 29.98 years to pay back of all of its debts.
ECPG has a Debt to FCF ratio (29.98) which is in line with its industry peers.
ECPG has a Debt/Equity ratio of 4.13. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of ECPG (4.13) is worse than 61.11% of its industry peers.

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

ROIC/WACC0.91

WACC7.63%

2.3 Liquidity

A Current Ratio of 0.93 indicates that ECPG may have some problems paying its short term obligations.
ECPG has a Current ratio (0.93) which is comparable to the rest of the industry.
A Quick Ratio of 0.93 indicates that ECPG may have some problems paying its short term obligations.
ECPG has a Quick ratio (0.93) which is in line with 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.
Measured over the past years, ECPG shows a decrease in Earnings Per Share. The EPS has been decreasing by -3.19% on average per year.
Looking at the last year, ECPG shows a quite strong growth in Revenue. The Revenue has grown by 17.52% 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)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.
Based on estimates for the next years, ECPG will show a very negative growth in Revenue. The Revenue will decrease by -22.84% on average per year.

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

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

ECPG is valuated cheaply with a Price/Earnings ratio of 6.05.
Based on the Price/Earnings ratio, ECPG is valued a bit cheaper than 74.07% of the companies in the same industry.
ECPG is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 5.81, the valuation of ECPG can be described as very cheap.
83.33% of the companies in the same industry are more expensive than ECPG, based on the Price/Forward Earnings ratio.
ECPG's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.26.

		Industry Rank	Sector Rank
PE	6.05
Fwd PE	5.81

4.2 Price Multiples

ECPG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. ECPG is cheaper than 68.52% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as ECPG.

		Industry Rank	Sector Rank
P/FCF	9.34
EV/EBITDA	10.68

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.