Encore Capital Group (NASDAQ:ECPG) Issues Earnings Results, Beats Expectations By $2.22 EPS

Encore Capital Group (NASDAQ:ECPG) posted its quarterly earnings data on Wednesday. The asset manager reported $5.57 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $3.35 by $2.22, FiscalAI reports. The business had revenue of $544.54 million during the quarter, compared to the consensus estimate of $466.80 million. Encore Capital Group had a net margin of 15.86% and a return on equity of 29.83%. The firm’s quarterly revenue was up 18.3% compared to the same quarter last year. During the same quarter last year, the company posted $3.17 earnings per share.

Here are the key takeaways from Encore Capital Group’s conference call:

• Encore reported strong third-quarter results: global collections rose 14% to a record $754 million, revenue increased 18% to $545 million, and net income grew 66% to $124 million.
• The company raised its 2026 guidance, now expecting global portfolio purchases of $1.5 billion–$1.55 billion, collections of $2.9 billion–$2.95 billion, and EPS of $15.50–$16. Management also expressed confidence in earnings growth in 2027.
• U.S. market conditions remain favorable, with elevated charge-offs supporting portfolio supply; MCM purchased $310 million of portfolios and collections rose 17%. Improved collections on recent U.S. vintages supported $111 million in changes in recoveries, including $59 million from higher future-recovery estimates.
• Encore’s balance sheet and cash generation strengthened: leverage fell to 2.3x, cash generation increased 18% year over year, and trailing 12-month ROIC rose to 15.7%. The company repurchased $27 million of shares in Q3 and said it could temporarily use more leverage for attractive purchasing opportunities.
• Management said U.S. portfolio pricing has edged higher, though improved collection efficiency has so far offset the increase and returns remain strong. It also accelerated some legal-related expenses as large portfolios aged into the legal collection stage.

Encore Capital Group Stock Performance

NASDAQ ECPG traded up $0.39 during trading on Wednesday, hitting $100.22. 294,593 shares of the company’s stock traded hands, compared to its average volume of 214,163. The company has a debt-to-equity ratio of 3.87, a quick ratio of 0.96 and a current ratio of 0.96. The stock has a market capitalization of $2.13 billion, a price-to-earnings ratio of 7.59 and a beta of 1.29. Encore Capital Group has a 12-month low of $41.10 and a 12-month high of $105.98. The business has a 50 day moving average of $99.09 and a 200-day moving average of $83.57.

Analysts Set New Price Targets

A number of research firms have recently weighed in on ECPG. Weiss Ratings raised shares of Encore Capital Group from a “buy (b-)” rating to a “buy (b)” rating in a research report on Thursday, October 8th. Citigroup restated a “market outperform” rating on shares of Encore Capital Group in a research note on Tuesday, August 11th. Truist Financial lifted their price target on shares of Encore Capital Group from $105.00 to $112.00 and gave the stock a “buy” rating in a report on Thursday, August 6th. Zacks Research downgraded Encore Capital Group from a “strong-buy” rating to a “hold” rating in a research note on Monday, October 5th. Finally, Northland Securities set a $124.00 price objective on Encore Capital Group in a report on Tuesday, October 13th. Five analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the company’s stock. According to data from MarketBeat.com, Encore Capital Group has an average rating of “Moderate Buy” and an average price target of $103.25.

About Encore Capital Group

Encore Capital Group, Inc is a specialty finance company that purchases portfolios of charged-off consumer receivables and provides debt recovery and management services. Through its operating businesses, the company works with consumers to resolve outstanding obligations through payment plans and other repayment arrangements.

Encore serves consumers and creditors across multiple markets, including the United States, the United Kingdom and other European countries. Its major operating platforms include Midland Credit Management in the United States and Cabot Credit Management in Europe.