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Encore Capital Group Inc (ECPG) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Encore Capital Group (ECPG - Free Report) ? Shares have been on the move with the stock up 23.1% over the past month. The stock hit a new 52-week high of $72.73 in the previous session. Encore Capital Group has gained 16.6% since the start of the year compared to the -11.7% move for the Zacks Finance sector and the -21% return for the Zacks Financial - Consumer Loans industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 4, 2022, Encore Capital Group reported EPS of $6.4 versus consensus estimate of $2 while it beat the consensus revenue estimate by 44.55%.
For the current fiscal year, Encore Capital Group is expected to post earnings of $12.88 per share on $1.52 billion in revenues. This represents a 14.39% change in EPS on a -5.58% change in revenues. For the next fiscal year, the company is expected to earn $10.15 per share on $1.41 billion in revenues. This represents a year-over-year change of -21.16% and -7.42%, respectively.
Valuation Metrics
Encore Capital Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Encore Capital Group has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 5.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 5.6X. On a trailing cash flow basis, the stock currently trades at 5.2X versus its peer group's average of 4.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Encore Capital Group currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Encore Capital Group fits the bill. Thus, it seems as though Encore Capital Group shares could still be poised for more gains ahead.
How Does ECPG Stack Up to the Competition?
Shares of ECPG have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is EZCORP, Inc. (EZPW - Free Report) . EZPW has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. EZCORP, Inc. beat our consensus estimate by 175%, and for the current fiscal year, EZPW is expected to post earnings of $0.62 per share on revenue of $838.11 million.
Shares of EZCORP, Inc. have gained 5.2% over the past month, and currently trade at a forward P/E of 12.97X and a P/CF of 3.96X.
The Financial - Consumer Loans industry may rank in the bottom 80% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for ECPG and EZPW, even beyond their own solid fundamental situation.
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Encore Capital Group Inc (ECPG) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Encore Capital Group (ECPG - Free Report) ? Shares have been on the move with the stock up 23.1% over the past month. The stock hit a new 52-week high of $72.73 in the previous session. Encore Capital Group has gained 16.6% since the start of the year compared to the -11.7% move for the Zacks Finance sector and the -21% return for the Zacks Financial - Consumer Loans industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 4, 2022, Encore Capital Group reported EPS of $6.4 versus consensus estimate of $2 while it beat the consensus revenue estimate by 44.55%.
For the current fiscal year, Encore Capital Group is expected to post earnings of $12.88 per share on $1.52 billion in revenues. This represents a 14.39% change in EPS on a -5.58% change in revenues. For the next fiscal year, the company is expected to earn $10.15 per share on $1.41 billion in revenues. This represents a year-over-year change of -21.16% and -7.42%, respectively.
Valuation Metrics
Encore Capital Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Encore Capital Group has a Value Score of A. The stock's Growth and Momentum Scores are B and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 5.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 5.6X. On a trailing cash flow basis, the stock currently trades at 5.2X versus its peer group's average of 4.4X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Encore Capital Group currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Encore Capital Group fits the bill. Thus, it seems as though Encore Capital Group shares could still be poised for more gains ahead.
How Does ECPG Stack Up to the Competition?
Shares of ECPG have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is EZCORP, Inc. (EZPW - Free Report) . EZPW has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of D.
Earnings were strong last quarter. EZCORP, Inc. beat our consensus estimate by 175%, and for the current fiscal year, EZPW is expected to post earnings of $0.62 per share on revenue of $838.11 million.
Shares of EZCORP, Inc. have gained 5.2% over the past month, and currently trade at a forward P/E of 12.97X and a P/CF of 3.96X.
The Financial - Consumer Loans industry may rank in the bottom 80% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for ECPG and EZPW, even beyond their own solid fundamental situation.