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    Encore Capital Group (ECPG): Reassessing Valuation After Strong Q3 2025 Earnings Beat and Analyst Upgrades

    Simply Wall St·12/06/2025 11:21:49
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    Encore Capital Group (ECPG) just turned heads with third quarter 2025 results that came in well ahead of expectations, thanks to stronger than anticipated collections that sharpen the focus on its earnings power.

    See our latest analysis for Encore Capital Group.

    That earnings beat seems to have reignited interest in Encore Capital Group, with a 30 day share price return of 23.7 percent helping lift the year to date share price return to 12.5 percent. Meanwhile, the 5 year total shareholder return of 35.7 percent points to steadier, longer term wealth creation despite only modest gains over three years.

    If Encore’s rebound has you thinking about what else might be quietly re rating, this could be a good moment to explore fast growing stocks with high insider ownership.

    With the stock now rallying and trading below, but not far from, analyst targets, the key question is whether Encore still offers mispriced value or if the market is already factoring in a stronger growth runway.

    Most Popular Narrative: 12.2% Undervalued

    Compared to Encore Capital Group's last close at $52.88, the most popular narrative points to a higher fair value anchored at $60.25, framing the recent rally as only a partial catch up.

    The combination of rising U.S. consumer credit card balances and elevated charge off rates is fueling a sustained increase in the supply of non performing loans available for purchase at attractive prices, which is expected to drive continued record levels of portfolio purchases and revenue growth. Increased investment in digital collections channels and operational innovation is delivering higher than forecast collection rates, with actual recoveries exceeding estimates, supporting improvements to both net margins and earnings.

    Read the complete narrative.

    Want to see how this narrative turns an unprofitable lender into a high margin cash engine, with shrinking share count and a rock bottom future earnings multiple driving that fair value?

    Result: Fair Value of $60.25 (UNDERVALUED)

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

    However, this upside depends on U.S. credit stress persisting. Higher funding costs or tighter regulation could quickly erode margins and acquisition opportunities.

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

    Build Your Own Encore Capital Group Narrative

    If you see the story differently or want to stress test the assumptions with your own research, you can build a personalized view in minutes: Do it your way.

    A great starting point for your Encore Capital Group research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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    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.