Encore Capital Group (NASDAQ:ECPG) Shares Gap Up on Strong Earnings

Key Points

• Encore Capital Group's stock surged from a previous close of $37.43 to an opening of $42.00 after reporting strong earnings, with an EPS of $2.49 that surpassed the $1.44 consensus estimate.
• The company's revenue for the quarter was $442.12 million, exceeding analysts' expectations of $383.42 million and reflecting a 24.4% increase year-over-year.
• Additionally, consensus ratings for the stock have improved, with one analyst upgrading it from "sell" to "hold" and a consensus price target of $62.67 indicating strong market confidence.

Encore Capital Group Inc (NASDAQ:ECPG - Get Free Report)'s stock price gapped up prior to trading on Thursday following a better than expected earnings announcement. The stock had previously closed at $37.43, but opened at $42.00. Encore Capital Group shares last traded at $40.44, with a volume of 95,601 shares.

The asset manager reported $2.49 EPS for the quarter, topping the consensus estimate of $1.44 by $1.05. Encore Capital Group had a negative net margin of 8.38% and a positive return on equity of 16.18%. The business had revenue of $442.12 million for the quarter, compared to analysts' expectations of $383.42 million. During the same quarter last year, the company posted $1.34 earnings per share. The company's quarterly revenue was up 24.4% compared to the same quarter last year.

Analyst Ratings Changes

Separately, Wall Street Zen upgraded shares of Encore Capital Group from a "sell" rating to a "hold" rating in a research note on Tuesday, May 13th. One investment analyst has rated the stock with a hold rating, three have assigned a buy rating and one has issued a strong buy rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of "Buy" and a consensus price target of $62.67.

Institutional Investors Weigh In On Encore Capital Group

A number of institutional investors have recently modified their holdings of the stock. Vanguard Group Inc. boosted its stake in shares of Encore Capital Group by 0.6% during the 4th quarter. Vanguard Group Inc. now owns 2,588,969 shares of the asset manager's stock valued at $123,675,000 after buying an additional 16,663 shares during the period. T. Rowe Price Investment Management Inc. boosted its stake in shares of Encore Capital Group by 30.1% during the 4th quarter. T. Rowe Price Investment Management Inc. now owns 1,416,499 shares of the asset manager's stock valued at $67,667,000 after buying an additional 327,637 shares during the period. Stephens Investment Management Group LLC boosted its stake in shares of Encore Capital Group by 9.1% during the 2nd quarter. Stephens Investment Management Group LLC now owns 1,248,831 shares of the asset manager's stock valued at $48,342,000 after buying an additional 104,367 shares during the period. Wellington Management Group LLP lifted its stake in shares of Encore Capital Group by 13.0% in the 1st quarter. Wellington Management Group LLP now owns 790,392 shares of the asset manager's stock valued at $27,095,000 after purchasing an additional 91,019 shares during the last quarter. Finally, D. E. Shaw & Co. Inc. lifted its stake in shares of Encore Capital Group by 5.3% in the 4th quarter. D. E. Shaw & Co. Inc. now owns 319,210 shares of the asset manager's stock valued at $15,249,000 after purchasing an additional 16,180 shares during the last quarter.

Encore Capital Group Stock Performance

The company has a debt-to-equity ratio of 4.63, a quick ratio of 0.80 and a current ratio of 0.80. The firm's 50 day moving average is $38.73 and its 200-day moving average is $39.03. The firm has a market cap of $946.26 million, a price-to-earnings ratio of -8.29 and a beta of 1.59.

Encore Capital Group Company Profile

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.

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