Core Viewpoint - The article emphasizes the importance of the Zacks Rank system and the Style Scores system in identifying undervalued stocks, particularly focusing on value investing strategies. Group 1: Zacks Rank and Value Investing - The Zacks Rank system focuses on earnings estimates and revisions to identify strong stocks [1] - Value investing is a popular method for finding undervalued stocks using fundamental analysis and traditional valuation metrics [2] - The Style Scores system allows investors to find stocks with specific traits, with a particular emphasis on the "Value" category for value investors [3] Group 2: Encore Capital Group (ECPG) Analysis - Encore Capital Group (ECPG) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential [4] - ECPG's current P/E ratio is 5.13, significantly lower than the industry average of 9.72, suggesting it may be undervalued [4] - The Forward P/E for ECPG has fluctuated between 4.14 and 9.37 over the past 12 months, with a median of 6.34 [4] - ECPG's P/S ratio is 0.66, compared to the industry's average P/S of 1.42, further indicating undervaluation [5] - Overall, ECPG is highlighted as one of the market's strongest value stocks based on its earnings outlook and valuation metrics [6]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum if future growth does not justify high valuations [1] - A safer approach involves investing in bargain stocks that exhibit recent price momentum [2] Group 2: Encore Capital Group (ECPG) Analysis - ECPG has shown a four-week price change of 10.6%, indicating growing investor interest [3] - Over the past 12 weeks, ECPG's stock gained 10.4%, demonstrating its ability to deliver positive returns over a longer timeframe [4] - ECPG has a beta of 1.65, suggesting it moves 65% more than the market in either direction [4] - ECPG has a Momentum Score of B, indicating a favorable time to invest [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - ECPG is trading at a Price-to-Sales ratio of 0.64, suggesting it is undervalued at 64 cents for each dollar of sales [6] Group 3: Investment Opportunities - ECPG is highlighted as a strong candidate for investment, with potential for further price appreciation [7] - Other stocks that meet the 'Fast-Paced Momentum at a Bargain' criteria are also available for consideration [7] - Zacks offers over 45 Premium Screens to help identify winning stock picks based on various investing styles [8]

Shares of Encore Capital Group (ECPG) have gained 11.1% over the past four weeks to close the last trading session at $39.04, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $57.25 indicates a potential upside of 46.6%.The average comprises four short-term price targets ranging from a low of $55 to a high of $61, with a standard deviation of $2.63. While the lowest estimate indi ...

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.Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional va ...

Core Insights - Encore Capital Group, Inc. (ECPG) shares have increased by 24.3% since the release of first-quarter 2025 results, driven by rising collections and strong portfolio purchasing, although higher expenses have partially offset these gains [1] Financial Performance - ECPG reported adjusted earnings per share (EPS) of $1.93 for Q1 2025, exceeding the Zacks Consensus Estimate by 55.7% and improving from $0.95 in the prior year [1] - Revenues increased by 19.6% year over year to $392.8 million, surpassing the consensus mark by 5.5% [2] - Total debt purchasing revenues rose by 20.8% year over year to $366.7 million, while servicing revenues increased by 10.6% to $22.5 million, beating the consensus estimate of $20 million [3] Collections and Expenses - Collections grew by 18% year over year to $604.8 million, exceeding the consensus estimate of $583.3 million, supported by strong portfolio purchasing and a stable collections environment [4] - Total operating expenses rose by 8% year over year to $263.4 million, driven by increased salaries, legal collection costs, and general administrative expenses [4] Interest and Net Income - Interest expenses increased by 26.5% year over year to $70.5 million, while net income surged by 101% year over year to $46.8 million [5] - Global portfolio purchases reached $367.9 million, up from $295.7 million a year ago, with $316.4 million deployed in the United States [5] Financial Position - As of March 31, 2025, total assets were $5 billion, up from $4.8 billion at the end of 2024, while cash and cash equivalents decreased to $187.1 million [5][6] - Borrowings increased to $3.8 billion from $3.7 billion, and total liabilities rose to $4.2 billion from $4 billion at the end of 2024 [6] - Total equity increased to $819.1 million from $767.3 million at the end of 2024 [6] Share Repurchase and Guidance - ECPG repurchased $10 million worth of shares in Q1 2025 [7] - Management expects portfolio purchasing to exceed $1.35 billion in 2025 and collections to grow by approximately 11% to $2.4 billion [8] Zacks Rank - ECPG currently holds a Zacks Rank 2 (Buy) [9]

Core Viewpoint - Encore Capital Group (ECPG) has shown a significant price increase of 38.2% over the past four weeks, with a mean price target of $58.50 indicating a potential upside of 44.4% from the current price of $40.51 [1] Price Targets and Analyst Consensus - The average price target for ECPG ranges from a low of $55 to a high of $66, with a standard deviation of $5.07, suggesting a relatively high agreement among analysts [2] - The lowest estimate indicates a potential increase of 35.8%, while the most optimistic estimate suggests a 62.9% upside [2] - Analysts' price targets should be approached with caution, as they may not always accurately reflect future stock movements [3][7] Earnings Estimates and Analyst Optimism - Analysts have shown strong agreement in revising ECPG's earnings estimates higher, which is a positive indicator for potential stock upside [4][11] - The Zacks Consensus Estimate for the current year has increased by 11.8% over the past month, with three estimates revised upward and no negative revisions [12] - ECPG holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Conclusion on Investment Potential - While the consensus price target may not be a reliable indicator of the extent of ECPG's potential gains, the direction implied by these targets appears to be a useful guide for further research [13]

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value ...

Core Insights - Encore Capital Group (ECPG) reported quarterly earnings of $1.93 per share, exceeding the Zacks Consensus Estimate of $1.24 per share, and up from $0.95 per share a year ago [1] - The earnings surprise for the quarter was 55.65%, following a previous quarter where the company reported earnings of $1.50 per share against an expectation of $1.55, resulting in a surprise of -3.23% [2] - The company generated revenues of $392.78 million for the quarter, surpassing the Zacks Consensus Estimate by 5.46%, compared to $328.39 million in the same quarter last year [3] Financial Performance - Over the last four quarters, Encore Capital Group has exceeded consensus EPS estimates two times and topped consensus revenue estimates three times [2][3] - The current consensus EPS estimate for the upcoming quarter is $1.42, with expected revenues of $385.75 million, and for the current fiscal year, the estimate is $6.02 on $1.57 billion in revenues [8] Market Position - Encore Capital Group shares have declined approximately 30.9% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [4] - The Zacks Industry Rank for Financial - Consumer Loans places it in the top 31% of over 250 Zacks industries, indicating a favorable position as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [9] Future Outlook - The company's future stock performance will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [4][5] - The current Zacks Rank for Encore Capital Group is 3 (Hold), suggesting that the shares are expected to perform in line with the market in the near future [7]

Financial Performance - Encore's portfolio purchases increased by 24% to $368 million in Q1 2025[6] - Collections increased by 18% to $605 million in Q1 2025 compared to Q1 2024[6] - EPS increased by 103.2% to $1.93 in Q1 2025 compared to $0.95 in Q1 2024[6, 32] - Cash generation for the trailing twelve months increased by 23% for Q1 2025 compared to Q1 2024[17] - The company's leverage improved to 2.6x from 2.8x year-over-year[6] Segment Performance - MCM (U.S.) portfolio purchases increased by 34% to a record $316 million in Q1 2025 compared to Q1 2024[6, 25] - MCM (U.S.) collections increased by 23% to a record $454 million in Q1 2025 compared to Q1 2024[6, 25] - Cabot (Europe) collections increased by 7% to $150 million in Q1 2025 compared to Q1 2024[6, 29] - Cabot (Europe) portfolio purchases were $51 million in Q1 2025, in line with historical trends[6, 29] Market Dynamics and Guidance - The company expects interest expense in 2025 to be $285 million[41] - The company expects the effective tax rate in 2025 to be in the mid-20's %[41] - The company reiterates its full-year guidance, expecting portfolio purchases to exceed $1.35 billion and collections to increase by 11% to $2.4 billion[41]

Financial Data and Key Metrics Changes - Portfolio purchases in Q1 were $368 million, up 24% compared to Q1 2024, while collections reached $654 million, an 18% increase [6][13][14] - Earnings per share for Q1 was $1.93, reflecting a 103% increase year-over-year [6][31] - Leverage improved to 2.6 times, down from 2.8 times a year ago [7][32] - Operating expenses increased by 8% to $263 million, indicating significant operating leverage [29] Business Line Data and Key Metrics Changes - Midland Credit Management (MCM) in the U.S. achieved record portfolio purchases of $316 million, a 34% increase year-over-year, and collections of $454 million, up 23% [9][18] - Cabot Credit Management in Europe reported portfolio purchases of $51 million and collections of $150 million, a 7% increase compared to the previous year [19][20] Market Data and Key Metrics Changes - U.S. revolving credit remains near record levels, with the credit card charge-off rate at its highest in over ten years, driving robust portfolio supply [15][16] - Delinquency rates in the U.S. are near multi-year highs, indicating favorable purchasing conditions [15][17] Company Strategy and Development Direction - The company focuses on markets with strong regulatory frameworks and stable long-term returns, primarily in the U.S. and the U.K. [12][11] - The three-pillar strategy emphasizes market focus, operational efficiency, and compliance to enhance performance and shareholder value [11][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the favorable U.S. market conditions for 2025, anticipating continued growth in portfolio purchases and collections [36][66] - The company expects global portfolio purchasing in 2025 to exceed $1.35 billion, with collections projected to grow by 11% to $2.4 billion [36] Other Important Information - The company resumed share repurchases in Q1, purchasing $10 million worth of shares [8][34] - Interest expense increased by 30% to $69 million due to higher debt balances and interest rates [30] Q&A Session Summary Question: Was the collections performance at Cabot a function of updated forecasts or underlying improvements? - Management indicated it was a combination of improved operations and updated forecasts [42] Question: What is the expected collections multiple for U.S. and Cabot? - Both MCM and Cabot had a collections multiple of 2.3 for Q1 [43] Question: Are purchasing conditions in the U.S. stable? - Management noted that purchasing conditions remain favorable, with expectations for continued strong supply [46] Question: Any volatility in collectability during Q1? - Management reported stable consumer behavior and no significant issues during tax season [47] Question: What drives the cash overs and negative revisions to forecasted recoveries? - Management explained that cash overs and NPV changes are based on different vintages and are not always directly correlated [54] Question: How should changes in recoveries impact core EPS? - Management provided an estimate that the changes in recoveries could translate to about 73 cents impact on EPS [59] Question: Will the pace of buybacks continue throughout 2025? - Future buybacks will depend on financial conditions and performance, but the current pace is expected to continue [62] Question: What is attracting the U.S. market for purchases? - The U.S. market is favorable due to high lending, elevated charge-offs, and ample supply of portfolios [66]