📊 ECPG Key Takeaways
Is Encore Capital Group Inc. (ECPG) a Good Investment?
Encore Capital demonstrates strong operational profitability with 35.4% operating margin and robust ROE of 26.3%, supported by substantial revenue growth of 1901.2% YoY. However, the extremely high debt-to-equity ratio of 4.13x and significant long-term debt of $4.0B present meaningful financial leverage risks that constrain the rating despite excellent operating performance.
Encore Capital Group shows strong current profitability, with a 35.4% operating margin, 14.5% net margin, and 26.3% ROE, while still generating positive free cash flow. However, balance-sheet risk is elevated with debt at 4.13x equity and only moderate 5.3x interest coverage, and the extreme revenue jump alongside flat net income suggests growth quality and comparability need closer scrutiny.
Why Buy Encore Capital Group Inc. Stock? ECPG Key Strengths
- Exceptional revenue growth of 1901.2% YoY indicating significant business expansion or major acquisition integration
- Strong operating margin of 35.4% and healthy net margin of 14.2% demonstrate efficient core operations
- Solid return on equity of 26.3% showing effective capital deployment despite high leverage
- Positive free cash flow of $126.9M with 7.2% FCF margin provides cash generation capacity for debt service
- Adequate interest coverage ratio of 5.3x suggesting manageable near-term debt service capability
- Strong operating profitability with $626.65M operating income and a 35.4% operating margin
- Solid shareholder returns on current capital base, highlighted by 26.3% ROE
- Positive cash generation with $153.20M operating cash flow and $126.93M free cash flow
ECPG Stock Risks: Encore Capital Group Inc. Investment Risks
- Extreme leverage with debt-to-equity ratio of 4.13x and $4.0B long-term debt poses significant financial distress risk if operations deteriorate
- Very large year-over-year revenue spike of 1901% is unsustainable and may indicate one-time event or accounting adjustment rather than organic growth
- Limited liquidity metrics available (N/A current and quick ratios) raises concerns about short-term financial flexibility
- Net income growth of 0.0% YoY despite 1901% revenue growth suggests operational challenges or one-time gains embedded in results
- Minimal cash position of $156.8M relative to $4.0B debt creates refinancing and operational stress vulnerability
- High leverage, with $4.03B of long-term debt and debt/equity of 4.13x
- Earnings quality concerns because net income was flat while reported revenue surged 1901.2% YoY
- Cash flow conversion is only moderate relative to earnings, with free cash flow margin at 7.2%
Key Metrics to Watch
- Operating cash flow sustainability and trend relative to net income quality
- Debt reduction trajectory and leverage ratio improvement toward industry norms
- Revenue growth normalization in following periods to assess organic versus one-time growth components
- Interest coverage ratio maintenance above 3.0x to ensure debt service safety
- Free cash flow conversion and allocation to debt paydown versus capital deployment
- Debt reduction and interest coverage
- Operating cash flow and free cash flow conversion versus net income
Encore Capital Group Inc. (ECPG) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
ECPG Profit Margin, ROE & Profitability Analysis
ECPG vs Finance Sector: How Encore Capital Group Inc. Compares
How Encore Capital Group Inc. compares to Finance sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Encore Capital Group Inc. Stock Overvalued? ECPG Valuation Analysis 2026
Based on fundamental analysis, Encore Capital Group Inc. has mixed fundamental signals relative to the Finance sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Encore Capital Group Inc. Balance Sheet: ECPG Debt, Cash & Liquidity
ECPG Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Encore Capital Group Inc.'s revenue has declined by 30% over the 5-year period, indicating business contraction. The most recent EPS of $-8.72 indicates the company is currently unprofitable.
ECPG Revenue Growth, EPS Growth & YoY Performance
ECPG Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $22.2M | $30.6M | $1.26 |
| Q2 2025 | $21.1M | $32.2M | $1.34 |
| Q1 2025 | $20.4M | $23.2M | $0.95 |
| Q3 2024 | $19.9M | $19.3M | $0.79 |
| Q2 2024 | $21.0M | $26.3M | $1.08 |
| Q1 2024 | $20.4M | $18.6M | $0.75 |
| Q3 2023 | $19.9M | $19.3M | $0.79 |
| Q2 2023 | $21.0M | $26.3M | $1.08 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Encore Capital Group Inc. Dividends, Buybacks & Capital Allocation
ECPG SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Encore Capital Group Inc. (CIK: 0001084961)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ECPG
What is the AI rating for ECPG?
Encore Capital Group Inc. (ECPG) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (HOLD) with 73% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ECPG's key strengths?
Claude: Exceptional revenue growth of 1901.2% YoY indicating significant business expansion or major acquisition integration. Strong operating margin of 35.4% and healthy net margin of 14.2% demonstrate efficient core operations. ChatGPT: Strong operating profitability with $626.65M operating income and a 35.4% operating margin. Solid shareholder returns on current capital base, highlighted by 26.3% ROE.
What are the risks of investing in ECPG?
Claude: Extreme leverage with debt-to-equity ratio of 4.13x and $4.0B long-term debt poses significant financial distress risk if operations deteriorate. Very large year-over-year revenue spike of 1901% is unsustainable and may indicate one-time event or accounting adjustment rather than organic growth. ChatGPT: High leverage, with $4.03B of long-term debt and debt/equity of 4.13x. Earnings quality concerns because net income was flat while reported revenue surged 1901.2% YoY.
What is ECPG's revenue and growth?
Encore Capital Group Inc. reported revenue of $1.8B.
Does ECPG pay dividends?
Encore Capital Group Inc. does not currently pay dividends.
Where can I find ECPG SEC filings?
Official SEC filings for Encore Capital Group Inc. (CIK: 0001084961) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ECPG's EPS?
Encore Capital Group Inc. has a diluted EPS of $10.91.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is ECPG a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Encore Capital Group Inc. has a BUY rating with 73% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is ECPG stock overvalued or undervalued?
Valuation metrics for ECPG: ROE of 26.3% (sector avg: 12%), net margin of 14.5% (sector avg: 25%). Higher ROE suggests strong returns relative to peers.
Should I buy ECPG stock in 2026?
Our dual AI analysis gives Encore Capital Group Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ECPG's free cash flow?
Encore Capital Group Inc.'s operating cash flow is $153.2M, with capital expenditures of $26.3M. FCF margin is 7.2%.
How does ECPG compare to other Finance stocks?
Vs Finance sector averages: Net margin 14.5% (avg: 25%), ROE 26.3% (avg: 12%), current ratio N/A (avg: 1.2).
Is Encore Capital Group Inc. carrying too much debt?
ECPG has a debt-to-equity ratio of 4.13x, which is above the Finance sector average of 2x. Combined with a current ratio below 1, this warrants careful monitoring of the balance sheet.
Why is ECPG's return on equity (ROE) so high?
Encore Capital Group Inc. has a return on equity of 26.3%, significantly above the Finance sector average of 12%. A high ROE indicates the company is efficient at generating profits from shareholder equity. This is supported by a 14.5% net margin.