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1. Company Snapshot

1.a. Company Description

Encore Capital Group, Inc., a specialty finance company, provides debt recovery solutions and other related services for consumers across financial assets worldwide.The company purchases portfolios of defaulted consumer receivables at deep discounts to face value, as well as manages them by working with individuals as they repay their obligations and works toward financial recovery.It is also involved in the provision of early stage collection, business process outsourcing, and contingent collection services, as well as debt servicing and other portfolio management services to credit originator for non-performing loans.


The company was incorporated in 1999 and is headquartered in San Diego, California.

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1.b. Last Insights on ECPG

Encore Capital Group's recent performance has been positively driven by its Q4 2025 earnings call, which likely showcased the company's robust financials. Additionally, the company received a consensus recommendation of "Moderate Buy" from six research firms, with four issuing a buy recommendation, according to MarketBeat.com. Furthermore, Encore Capital Group was listed as a Zacks Rank #1 (Strong Buy) value stock on March 2, 2026, alongside ECPG, UVE, and CRI. The company's solid financial position and growth prospects have garnered attention from investors and analysts.

1.c. Company Highlights

2. Encore Capital Group's 2025 Results: Record Portfolio Purchases and Collections Drive Growth

Encore Capital Group reported a strong financial performance in 2025, with record portfolio purchases of $1.4 billion, up 4% from 2024, and record collections of $2.6 billion, up 20%. The company's net income was $257 million, or $10.91 EPS, significantly higher than the estimated $2.2 EPS. The average receivable portfolios rose to $4.1 billion, indicating a substantial increase in the company's asset base.

Publication Date: Mar -09

📋 Highlights
  • Record Portfolio Purchases & Collections:: 2025 saw $1.4B in purchases (+4%) and $2.6B in collections (+20%), with average receivable portfolios rising 12% to $4.1B.
  • Strong US Market Performance:: MCM’s US portfolio purchases hit $1.17B (+18%), while collections surged 24% to $1.95B, driven by favorable consumer lending and charge-off trends.
  • Improved Leverage & Share Repurchases:: Leverage reduced to 2.4x, and $90M was spent repurchasing 9% of shares, reflecting capital efficiency and shareholder focus.
  • 2026 Guidance & ROIC Growth:: EPS targets a 10% increase to $12/share, with ROIC at 13.7% in 2025 and a 2–3x leverage target, supported by $300M in interest/other income.
  • Operational Efficiency Gains:: Collections yield reached 63.6%, digital/omnichannel efforts boosted recoveries, and cash overs from US operations migrated into portfolio revenue in 2025.

Operational Highlights

The company's value engine, driven by three critical drivers - buying, collecting, and funding - delivered impressive results. In 2025, 83% of portfolio purchases were in the US, where market conditions were attractive. MCM, the US business, purchased a record $1.17 billion of portfolios, up 18% from 2024, and collections rose 24% to a record $1.95 billion.

Segment Performance

Cabot, the European business, delivered solid results with collections up 9% to $641 million. The company's global portfolio revenue grew 12% to $1.46 billion, and the collection yield was 63.6%. These results demonstrate the effectiveness of Encore's operational strategy and its ability to drive growth across different regions.

Outlook and Guidance

For 2026, Encore expects to maintain its growth momentum, with projected portfolio purchases of $1.4 billion and global collections of $2.7 billion. The company aims to maintain a strong balance sheet, with a target leverage range of 2-3x, and a focus on buying portfolios at attractive returns and share repurchases. The expected EPS growth of 10% to $12 per share is driven by a combination of interest expense and other income of approximately $300 million, and an effective tax rate in the mid-20s.

Valuation and Metrics

Encore's current valuation metrics indicate a relatively attractive position, with a P/E Ratio of 6.15 and a P/B Ratio of 1.62. The company's ROIC improved to 13.7% in 2025, indicating a strong return on invested capital. With a Net Debt / EBITDA ratio of 2.4x, Encore's leverage is expected to trend down, driven by strong collections and purchasing growth.

Capital Allocation and Shareholder Returns

Encore's priorities for capital allocation are clear, with a focus on share repurchases and share buybacks. The company has demonstrated its commitment to returning value to shareholders, with a significant share repurchase program in place. With its strong financial performance and attractive valuation metrics, Encore is well-positioned to continue delivering value to its shareholders.

3. NewsRoom

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3 Momentum Anomaly Stocks to Buy as Oil Prices Appear to Decline

Mar -11

Source: zacks.com

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Encore Capital Group Inc (NASDAQ:ECPG) Given Average Recommendation of “Buy” by Analysts

Mar -11

Source: defenseworld.net

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Best Momentum Stock to Buy for March 2nd

Mar -02

Source: zacks.com

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Best Value Stocks to Buy for March 2nd

Mar -02

Source: zacks.com

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Encore Capital Group, Inc. (ECPG) Q4 2025 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

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Encore Capital Group Inc (NASDAQ:ECPG) Receives Consensus Recommendation of “Moderate Buy” from Brokerages

Feb -14

Source: defenseworld.net

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Y Intercept Hong Kong Ltd Invests $991,000 in Encore Capital Group Inc $ECPG

Feb -02

Source: defenseworld.net

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BloombergSen Inc. Sells 249,818 Shares of Encore Capital Group Inc $ECPG

Jan -20

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.63%)

6. Segments

Receivable Portfolio

Expected Growth: 12%

Encore Capital Group's 12% growth in Receivable Portfolio is driven by strategic acquisitions, expansion into new markets, and increased investment in digital collections. Additionally, favorable regulatory environments, rising consumer debt, and effective portfolio management practices have contributed to this growth.

Servicing Revenue

Expected Growth: 10%

Encore Capital Group's 10% growth in Servicing Revenue is driven by increasing demand for debt recovery services, expansion into new markets, and strategic acquisitions. Additionally, the company's investments in digital transformation and process automation have improved operational efficiency, leading to higher revenue generation.

Changes in Recoveries

Expected Growth: 8%

The 8% growth in recoveries from Encore Capital Group, Inc. is driven by increased collections from charged-off debt, expansion into new markets, and improved operational efficiency. Additionally, strategic acquisitions and partnerships have enhanced the company's capabilities, leading to higher recovery rates. Furthermore, favorable regulatory environments and a growing demand for debt recovery services have also contributed to this growth.

Other

Expected Growth: 11%

Encore Capital Group's 11% growth in 'Other' segment is driven by increasing demand for debt recovery services, expansion into new markets, and strategic acquisitions. Additionally, the company's investments in digital transformation and data analytics have improved operational efficiency, leading to higher revenue and profitability.

7. Detailed Products

Contingency Fee Collections

Encore Capital Group provides contingency fee collections services, where the company earns a fee only if it successfully collects the debt.

Portfolio Purchasing

Encore Capital Group purchases debt portfolios from creditors, providing them with immediate liquidity.

First-Party Collections

Encore Capital Group provides first-party collections services, where the company acts as an extension of the creditor's in-house collections team.

Third-Party Collections

Encore Capital Group provides third-party collections services, where the company acts as an independent collections agency.

Business Process Outsourcing (BPO)

Encore Capital Group provides BPO services, including customer service, sales, and back-office operations.

Digital Debt Collection

Encore Capital Group provides digital debt collection services, using data analytics and digital channels to engage with debtors.

8. Encore Capital Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Encore Capital Group, Inc. is medium due to the presence of alternative debt recovery solutions, but the company's diversified portfolio and strong brand recognition mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low for Encore Capital Group, Inc. as the company's clients are primarily large financial institutions and governments, which have limited negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Encore Capital Group, Inc. as the company relies on a network of suppliers and agents to collect debts, but has some flexibility to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low for Encore Capital Group, Inc. due to the high barriers to entry, including regulatory hurdles and the need for significant capital investment.

Intensity Of Rivalry

The intensity of rivalry is high for Encore Capital Group, Inc. due to the competitive nature of the debt recovery industry, with several established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 77.99%
Debt Cost 4.90%
Equity Weight 22.01%
Equity Cost 10.82%
WACC 6.20%
Leverage 354.29%

11. Quality Control: Encore Capital Group, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Guild

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Value: 6.9

Growth: 3.8

Quality: 5.4

Yield: 8.0

Momentum: 9.0

Volatility: 6.0

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A-Score: 5.7/10

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Growth: 7.1

Quality: 7.4

Yield: 0.0

Momentum: 5.0

Volatility: 7.7

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Ocwen Financial

A-Score: 4.4/10

Value: 9.5

Growth: 3.8

Quality: 4.3

Yield: 0.0

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Volatility: 2.7

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loanDepot

A-Score: 4.2/10

Value: 9.2

Growth: 2.2

Quality: 3.2

Yield: 2.0

Momentum: 7.5

Volatility: 1.0

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Security National Financial

A-Score: 4.0/10

Value: 9.0

Growth: 5.0

Quality: 3.1

Yield: 0.0

Momentum: 1.0

Volatility: 6.0

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Encore Capital Group

A-Score: 3.9/10

Value: 7.1

Growth: 2.4

Quality: 3.6

Yield: 0.0

Momentum: 6.0

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

67.22$

Current Price

67.22$

Potential

-0.00%

Expected Cash-Flows