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Is Encore Capital Group (ECPG) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Encore Capital Group (ECPG - Free Report) is a stock many investors are watching right now. ECPG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 4.90 right now. For comparison, its industry sports an average P/E of 5.40. Over the past year, ECPG's Forward P/E has been as high as 8.07 and as low as 4.76, with a median of 6.03.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ECPG has a P/S ratio of 0.84. This compares to its industry's average P/S of 1.06.

If you're looking for another solid Financial - Consumer Loans value stock, take a look at EZCORP (EZPW - Free Report) . EZPW is a # 2 (Buy) stock with a Value score of A.

Shares of EZCORP currently holds a Forward P/E ratio of 9.75, and its PEG ratio is 0.28. In comparison, its industry sports average P/E and PEG ratios of 5.40 and 0.22.

EZPW's price-to-earnings ratio has been as high as 18.32 and as low as 9.21, with a median of 13.21, while its PEG ratio has been as high as 0.48 and as low as 0.26, with a median of 0.34, all within the past year.

EZCORP sports a P/B ratio of 0.61 as well; this compares to its industry's price-to-book ratio of 0.72. In the past 52 weeks, EZPW's P/B has been as high as 0.72, as low as 0.47, with a median of 0.58.

These are only a few of the key metrics included in Encore Capital Group and EZCORP strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ECPG and EZPW look like an impressive value stock at the moment.


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