We assign a fundamental rating of 3 out of 10 to ECPG. ECPG was compared to 54 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 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.
ECPG had a positive operating cash flow in the past year.
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

ECPG has a worse Return On Assets (-0.86%) than 87.04% of its industry peers.
The Return On Equity of ECPG (-4.74%) is worse than 85.19% of its industry peers.
The Return On Invested Capital of ECPG (6.93%) is better than 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

With a decent Operating Margin value of 28.07%, ECPG is doing good in the industry, outperforming 75.93% of the companies in the same industry.
ECPG's Operating Margin has declined in the last couple of years.
ECPG's Gross Margin of 79.06% is fine compared to the rest 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

ECPG has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
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.
The Altman-Z score of ECPG (1.03) is better than 66.67% 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's Debt to FCF ratio of 29.98 is in line compared to the rest of the industry. ECPG outperforms 48.15% of its industry peers.
A Debt/Equity ratio of 4.13 is on the high side and indicates that ECPG has dependencies on debt financing.
ECPG's Debt to Equity ratio of 4.13 is on the low side compared to the rest of the industry. ECPG is outperformed by 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

WACC7.65%

2.3 Liquidity

ECPG has a Current Ratio of 0.93. 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 of 0.93. This is comparable to the rest of the industry: ECPG outperforms 44.44% of its industry peers.
ECPG has a Quick Ratio of 0.93. This is a bad value and indicates that ECPG is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.93, ECPG is in line with its industry, outperforming 44.44% of the companies in the same industry.

		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.
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.
The Revenue is expected to decrease by -22.84% on average over the next years. This is quite bad

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

Based on the Price/Earnings ratio of 6.07, the valuation of ECPG can be described as very cheap.
Based on the Price/Earnings ratio, ECPG is valued a bit cheaper than 74.07% of the companies in the same industry.
When comparing the Price/Earnings ratio of ECPG to the average of the S&P500 Index (28.32), we can say ECPG is valued rather cheaply.
A Price/Forward Earnings ratio of 5.83 indicates a rather cheap valuation of ECPG.
Based on the Price/Forward Earnings ratio, ECPG is valued cheaply inside the industry as 81.48% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 25.57. ECPG is valued rather cheaply when compared to this.

		Industry Rank	Sector Rank
PE	6.07
Fwd PE	5.83

4.2 Price Multiples

70.37% 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	9.38
EV/EBITDA	10.63

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.
ECPG's earnings are expected to decrease with -19.01% in the coming years. This may justify a cheaper valuation.