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    Encore Capital Group (ECPG) Valuation Check After Refinancing And Redemption Of Senior Secured Notes

    Simply Wall St·05/26/2026 11:18:23
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    Encore Capital Group (ECPG) has just overhauled its balance sheet by issuing new euro and dollar senior secured notes, and is moving to redeem existing 2028 and 2029 debt using the fresh proceeds and its revolving credit facility.

    See our latest analysis for Encore Capital Group.

    The recent refinancing comes after a strong run in the stock, with a 90 day share price return of 35.54% and a year to date share price return of 43.44%, alongside a 1 year total shareholder return of 105.43%, which points to powerful momentum.

    If this kind of move has you thinking about what else is out there, it could be a good moment to scan the market using our screener of 20 top founder-led companies

    With Encore’s refinancing in motion and the stock up sharply over the past year, the key question now is whether the current price still underestimates its future potential or if the market is already pricing in further growth.

    Most Popular Narrative: 33.4% Undervalued

    Encore Capital Group's most followed narrative pegs fair value at $120.38 per share, compared with the last close of $80.20. This frames the recent refinancing against a larger valuation gap.

    As I have previously written, ECPG is solid and undervalued. Despite recent analyst attention and a meaningful increase in its share price, I believe it remains undervalued. My valuation starts with its ERC, or Estimated Remaining Collections, which, based on the company’s latest filings, is approximately $10 billion. On that basis alone, the runoff or liquidation value of the company appears to far exceed its current market cap of less than $2 billion. Analysts are currently providing valuation ranges of roughly $80 to $110 per share, largely based on performance and earnings outlook. In my view, that range still misses five important short and long term considerations.

    Read the complete narrative.

    According to Joe222, the core of this thesis is not just headline ERC, but how cash generation, margins and a future earnings multiple fit together. The key question is which assumptions power a fair value that sits well above current pricing, and how they tie into Encore Capital Group's scale and cash collection profile.

    Result: Fair Value of $120.38 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, there are clear risks here, including past goodwill write downs around Cabot and concerns that slower technology adoption could leave the business looking ex-growth.

    Find out about the key risks to this Encore Capital Group narrative.

    Next Steps

    With sentiment this mixed, it makes sense to look at the underlying data yourself and decide whether the current setup fits your risk tolerance and goals, starting with the 4 key rewards and 2 important warning signs.

    Looking for more investment ideas?

    If Encore has caught your attention, do not stop here. The next step is lining up a watchlist of fresh ideas that fit the way you invest.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.