Encore Capital Group, Inc. Yearly Results: Here's What Analysts Are Forecasting For Next Year
Encore Capital Group, Inc. (NASDAQ:ECPG) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Encore Capital Group reported in line with analyst predictions, delivering revenues of US$1.4b and statutory earnings per share of US$5.33, suggesting the business is executing well and in line with its plan. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Encore Capital Group after the latest results.
View our latest analysis for Encore Capital Group
Taking into account the latest results, the latest consensus from Encore Capital Group's five analysts is for revenues of US$1.49b in 2020, which would reflect a credible 6.3% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to swell 19% to US$6.43. Before this earnings report, analysts had been forecasting revenues of US$1.45b and earnings per share (EPS) of US$5.94 in 2020. So there seems to have been a moderate uplift in analyst sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Despite these upgrades, analysts have not made any major changes to their price target of US$45.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Encore Capital Group analyst has a price target of US$50.00 per share, while the most pessimistic values it at US$39.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 6.3%, in line with its 5.6% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So it's pretty clear that Encore Capital Group is expected to grow slower than similar companies in the same market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Encore Capital Group's earnings potential next year. Fortunately, analysts also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider market. The consensus price target held steady at US$45.00, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Encore Capital Group going out to 2022, and you can see them free on our platform here..
You can also see whether Encore Capital Group is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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