📊 ECPG Key Takeaways
Is ECPG a Good Investment? Thesis Analysis
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.
Why Buy 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
ECPG Investment Risks to Consider
- 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
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
ECPG Financial Metrics
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
ECPG Profitability Ratios
ECPG vs Default Sector
How ENCORE CAPITAL GROUP INC compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is ECPG Overvalued or Undervalued?
Based on fundamental analysis, ENCORE CAPITAL GROUP INC has mixed fundamental signals relative to the Default 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.
ECPG Balance Sheet & Liquidity
ECPG 5-Year Financial Trend & Growth Analysis
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 Growth Metrics (YoY)
ECPG Quarterly 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.
ECPG Capital Allocation
ECPG SEC 10-K & 10-Q Filing 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 an AI rating of BUY with 72% 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.
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.
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 March 2026, ENCORE CAPITAL GROUP INC has a BUY rating with 72% 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: 15%), net margin of 14.5% (sector avg: 12%). 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 above 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 Default stocks?
Vs Default sector averages: Net margin 14.5% (avg: 12%), ROE 26.3% (avg: 15%), current ratio N/A (avg: 1.8).