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Why Is Encore Capital Group (ECPG) Down 1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Encore Capital Group (ECPG - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Encore Capital Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Encore Capital’s Q2 Earnings Miss Despite Revenue Growth & Record Collections
Encore Capital’s second-quarter 2026 earnings per share of $2.81 missed the Zacks Consensus Estimate of $3.07. However, the bottom line increased 13% year over year. The reported quarter’s earnings included refinancing costs of $1 per share.
Results primarily benefited from record global collections, strong U.S. execution, higher debt purchasing revenues and a robust balance sheet. However, an increase in expenses, along with lower servicing and other revenues, were the undermining factors.
Net income increased 9% year over year to $64 million.
Revenues Improve, Expenses Rise
Quarterly revenues of $491.9 million surpassed the Zacks Consensus Estimate of $462.1 million. The top line increased 11% from the prior-year quarter.
Total debt purchasing revenues increased 13.1% from the prior-year quarter to $471.4 million. However, servicing revenues and other revenues declined 18.3% and 25%, respectively.
Total operating expenses increased 4.7% from the prior-year quarter to $305 million. The rise was due to an increase in salaries and employee benefits costs, and cost of legal collections.
Total global portfolio purchases were $443.8 million, up 20.9% year over year. The increase in portfolio purchases was driven by strong purchasing activity across both MCM and Cabot Credit Management businesses as market supply remained favorable and the company continued to deploy capital into attractive portfolios.
MCM portfolio purchases were $372.3 million in the quarter, up 17.3%. This represented the company’s strongest U.S. purchasing quarter. Cabot posted portfolio purchases of $71.5 million, up 43.5% year over year.
Global collections from purchased receivables increased 13% year over year to a record $737 million. MCM collections rose 16.6% to $571.9 million. The Cabot Credit Management collections were $164.3 million, up marginally from the prior-year quarter.
Balance Sheet Strong
As of June 30, 2026, Encore Capital had total assets worth $5.57 billion, up from $5.34 billion as of Dec. 31, 2025. The cash and cash equivalents balance was $182.9 million, up from $156.8 million at the end of 2025.
Borrowings were $4.18 billion as of June 30, 2026, while stockholders’ equity was $1.08 billion.
Share Repurchase Update
In the reported quarter, the company repurchased approximately $27 million in shares.
2026 Outlook
Given the strong first-half results, management raised its global collections guidance. It now expects collections in 2026 to increase 8-10% year over year to $2.8-$2.85 billion. Earlier, the company anticipated growth of 8% to $2.8 billion.
The company also raised its earnings outlook. It expects EPS to be $13-$14, even after absorbing $1 per share of refinancing costs incurred in the second quarter. Previously, earnings were projected to grow 19% to $13 per share.
Encore Capital maintained its portfolio purchasing outlook of $1.4-$1.5 billion. Interest expenses and other income are projected to be $295 million.
The effective tax rate is anticipated to be in the mid-20%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 13.88% due to these changes.
VGM Scores
Currently, Encore Capital Group has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Encore Capital Group has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
View the Zacks #1 Rank List
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Why Is Encore Capital Group (ECPG) Down 1% Since Last Earnings Report?
It has been about a month since the last earnings report for Encore Capital Group (ECPG - Free Report) . Shares have lost about 1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Encore Capital Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Encore Capital’s Q2 Earnings Miss Despite Revenue Growth & Record Collections
Encore Capital’s second-quarter 2026 earnings per share of $2.81 missed the Zacks Consensus Estimate of $3.07. However, the bottom line increased 13% year over year. The reported quarter’s earnings included refinancing costs of $1 per share.
Results primarily benefited from record global collections, strong U.S. execution, higher debt purchasing revenues and a robust balance sheet. However, an increase in expenses, along with lower servicing and other revenues, were the undermining factors.
Net income increased 9% year over year to $64 million.
Revenues Improve, Expenses Rise
Quarterly revenues of $491.9 million surpassed the Zacks Consensus Estimate of $462.1 million. The top line increased 11% from the prior-year quarter.
Total debt purchasing revenues increased 13.1% from the prior-year quarter to $471.4 million. However, servicing revenues and other revenues declined 18.3% and 25%, respectively.
Total operating expenses increased 4.7% from the prior-year quarter to $305 million. The rise was due to an increase in salaries and employee benefits costs, and cost of legal collections.
Total global portfolio purchases were $443.8 million, up 20.9% year over year. The increase in portfolio purchases was driven by strong purchasing activity across both MCM and Cabot Credit Management businesses as market supply remained favorable and the company continued to deploy capital into attractive portfolios.
MCM portfolio purchases were $372.3 million in the quarter, up 17.3%. This represented the company’s strongest U.S. purchasing quarter. Cabot posted portfolio purchases of $71.5 million, up 43.5% year over year.
Global collections from purchased receivables increased 13% year over year to a record $737 million. MCM collections rose 16.6% to $571.9 million. The Cabot Credit Management collections were $164.3 million, up marginally from the prior-year quarter.
Balance Sheet Strong
As of June 30, 2026, Encore Capital had total assets worth $5.57 billion, up from $5.34 billion as of Dec. 31, 2025. The cash and cash equivalents balance was $182.9 million, up from $156.8 million at the end of 2025.
Borrowings were $4.18 billion as of June 30, 2026, while stockholders’ equity was $1.08 billion.
Share Repurchase Update
In the reported quarter, the company repurchased approximately $27 million in shares.
2026 Outlook
Given the strong first-half results, management raised its global collections guidance. It now expects collections in 2026 to increase 8-10% year over year to $2.8-$2.85 billion. Earlier, the company anticipated growth of 8% to $2.8 billion.
The company also raised its earnings outlook. It expects EPS to be $13-$14, even after absorbing $1 per share of refinancing costs incurred in the second quarter. Previously, earnings were projected to grow 19% to $13 per share.
Encore Capital maintained its portfolio purchasing outlook of $1.4-$1.5 billion.
Interest expenses and other income are projected to be $295 million.
The effective tax rate is anticipated to be in the mid-20%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates revision.
The consensus estimate has shifted 13.88% due to these changes.
VGM Scores
Currently, Encore Capital Group has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock has a grade of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Encore Capital Group has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.