Encore Capital Group (NASDAQ:ECPG) Shares Gap Up Following Better-Than-Expected 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 before the market opened 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 traded.

The asset manager reported $2.49 EPS for the quarter, beating the consensus estimate of $1.44 by $1.05. The company had revenue of $442.12 million for the quarter, compared to analyst estimates of $383.42 million. Encore Capital Group had a positive return on equity of 19.61% and a negative net margin of 6.07%. The firm's revenue was up 24.4% compared to the same quarter last year. During the same period last year, the company posted $1.34 earnings per share.

Analysts Set New Price Targets

Separately, Wall Street Zen upgraded Encore Capital Group from a "sell" rating to a "hold" rating in a research report on Tuesday, May 13th. One research analyst has rated the stock with a hold rating, three have issued a buy rating and one has issued a strong buy rating to the company. Based on data from MarketBeat.com, the stock 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 company. T. Rowe Price Investment Management Inc. boosted its position in shares of Encore Capital Group by 30.1% in the fourth 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 acquiring an additional 327,637 shares during the period. Stephens Investment Management Group LLC boosted its stake in Encore Capital Group by 9.1% in the 2nd quarter. Stephens Investment Management Group LLC now owns 1,248,831 shares of the asset manager's stock worth $48,342,000 after purchasing an additional 104,367 shares in the last quarter. Wellington Management Group LLP raised its position in 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 worth $27,095,000 after buying an additional 91,019 shares during the last quarter. Geode Capital Management LLC lifted its stake in shares of Encore Capital Group by 2.5% in the 2nd quarter. Geode Capital Management LLC now owns 583,148 shares of the asset manager's stock worth $22,577,000 after purchasing an additional 14,353 shares during the period. Finally, D. E. Shaw & Co. Inc. raised its stake in Encore Capital Group by 5.3% during the 4th quarter. D. E. Shaw & Co. Inc. now owns 319,210 shares of the asset manager's stock worth $15,249,000 after acquiring an additional 16,180 shares during the period.

Encore Capital Group Stock Performance

The firm's 50-day moving average price is $38.78 and its 200-day moving average price is $38.75. The company has a debt-to-equity ratio of 4.43, a current ratio of 0.81 and a quick ratio of 0.81. The stock has a market cap of $914.97 million, a P/E ratio of -10.64 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.