Intrinsic value of Encore Capital Group - ECPG

Previous Close

$40.45

  Intrinsic Value

$2,122

stock screener

  Rating & Target

str. buy

+999%

Previous close

$40.45

 
Intrinsic value

$2,122

 
Up/down potential

+999%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as ECPG.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ECPG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Encore Capital Group (ECPG) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -8.94
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,029
  1,646
  2,544
  3,804
  5,520
  7,787
  10,706
  14,370
  18,869
  24,280
  30,667
  38,082
  46,559
  56,119
  66,770
  78,510
  91,326
  105,200
  120,109
  136,030
  152,938
  170,812
  189,632
  209,384
  230,060
  251,656
  274,176
  297,628
  322,028
  347,399
  373,768
Variable operating expenses, $m
 
  931
  1,395
  2,048
  2,936
  4,110
  5,621
  7,518
  9,847
  12,648
  15,955
  19,715
  24,104
  29,053
  34,568
  40,646
  47,281
  54,463
  62,182
  70,425
  79,178
  88,431
  98,175
  108,401
  119,105
  130,286
  141,944
  154,086
  166,718
  179,853
  193,504
Fixed operating expenses, $m
 
  186
  190
  195
  200
  205
  210
  215
  221
  226
  232
  237
  243
  250
  256
  262
  269
  275
  282
  289
  297
  304
  312
  319
  327
  336
  344
  353
  361
  370
  380
Total operating expenses, $m
  788
  1,117
  1,585
  2,243
  3,136
  4,315
  5,831
  7,733
  10,068
  12,874
  16,187
  19,952
  24,347
  29,303
  34,824
  40,908
  47,550
  54,738
  62,464
  70,714
  79,475
  88,735
  98,487
  108,720
  119,432
  130,622
  142,288
  154,439
  167,079
  180,223
  193,884
Operating income, $m
  242
  530
  958
  1,561
  2,384
  3,472
  4,875
  6,637
  8,801
  11,405
  14,480
  18,129
  22,211
  26,816
  31,947
  37,602
  43,777
  50,461
  57,645
  65,316
  73,464
  82,076
  91,146
  100,664
  110,628
  121,035
  131,888
  143,190
  154,949
  167,176
  179,884
EBITDA, $m
  277
  614
  1,045
  1,653
  2,481
  3,577
  4,990
  6,764
  8,944
  11,566
  14,663
  18,258
  22,369
  27,006
  32,173
  37,869
  44,087
  50,818
  58,053
  65,778
  73,983
  82,656
  91,789
  101,375
  111,409
  121,890
  132,818
  144,200
  156,042
  168,355
  181,153
Interest expense (income), $m
  148
  143
  239
  377
  572
  837
  1,187
  1,637
  2,203
  2,898
  3,733
  4,719
  5,864
  7,173
  8,649
  10,294
  12,106
  14,085
  16,227
  18,529
  20,987
  23,598
  26,357
  29,263
  32,313
  35,505
  38,840
  42,317
  45,937
  49,705
  53,622
Earnings before tax, $m
  57
  387
  719
  1,184
  1,812
  2,636
  3,688
  4,999
  6,598
  8,507
  10,747
  13,409
  16,347
  19,643
  23,298
  27,309
  31,670
  36,376
  41,418
  46,787
  52,476
  58,479
  64,788
  71,401
  78,315
  85,530
  93,048
  100,873
  109,011
  117,471
  126,262
Tax expense, $m
  38
  104
  194
  320
  489
  712
  996
  1,350
  1,781
  2,297
  2,902
  3,621
  4,414
  5,304
  6,290
  7,373
  8,551
  9,822
  11,183
  12,633
  14,169
  15,789
  17,493
  19,278
  21,145
  23,093
  25,123
  27,236
  29,433
  31,717
  34,091
Net income, $m
  77
  282
  525
  864
  1,323
  1,924
  2,692
  3,650
  4,817
  6,210
  7,845
  9,789
  11,933
  14,339
  17,007
  19,935
  23,119
  26,555
  30,235
  34,155
  38,308
  42,689
  47,295
  52,123
  57,170
  62,437
  67,925
  73,637
  79,578
  85,754
  92,171

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  150
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  3,671
  5,638
  8,711
  13,028
  18,903
  26,669
  36,663
  49,213
  64,620
  83,150
  105,025
  130,417
  159,448
  192,188
  228,666
  268,870
  312,761
  360,274
  411,334
  465,857
  523,761
  584,972
  649,424
  717,070
  787,878
  861,837
  938,958
  1,019,273
  1,102,835
  1,189,721
  1,280,028
Adjusted assets (=assets-cash), $m
  3,521
  5,638
  8,711
  13,028
  18,903
  26,669
  36,663
  49,213
  64,620
  83,150
  105,025
  130,417
  159,448
  192,188
  228,666
  268,870
  312,761
  360,274
  411,334
  465,857
  523,761
  584,972
  649,424
  717,070
  787,878
  861,837
  938,958
  1,019,273
  1,102,835
  1,189,721
  1,280,028
Revenue / Adjusted assets
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
  0.292
Average production assets, $m
  95
  151
  234
  350
  508
  716
  985
  1,322
  1,736
  2,234
  2,821
  3,504
  4,283
  5,163
  6,143
  7,223
  8,402
  9,678
  11,050
  12,515
  14,070
  15,715
  17,446
  19,263
  21,166
  23,152
  25,224
  27,382
  29,627
  31,961
  34,387
Working capital, $m
  0
  -240
  -371
  -555
  -806
  -1,137
  -1,563
  -2,098
  -2,755
  -3,545
  -4,477
  -5,560
  -6,798
  -8,193
  -9,748
  -11,462
  -13,334
  -15,359
  -17,536
  -19,860
  -22,329
  -24,939
  -27,686
  -30,570
  -33,589
  -36,742
  -40,030
  -43,454
  -47,016
  -50,720
  -54,570
Total debt, $m
  2,809
  4,681
  7,398
  11,213
  16,407
  23,272
  32,107
  43,201
  56,821
  73,201
  92,539
  114,986
  140,649
  169,591
  201,838
  237,378
  276,177
  318,179
  363,316
  411,514
  462,702
  516,812
  573,788
  633,587
  696,181
  761,561
  829,736
  900,734
  974,603
  1,051,411
  1,131,242
Total liabilities, $m
  3,111
  4,984
  7,701
  11,516
  16,710
  23,575
  32,410
  43,504
  57,124
  73,504
  92,842
  115,289
  140,952
  169,894
  202,141
  237,681
  276,480
  318,482
  363,619
  411,817
  463,005
  517,115
  574,091
  633,890
  696,484
  761,864
  830,039
  901,037
  974,906
  1,051,714
  1,131,545
Total equity, $m
  559
  654
  1,011
  1,511
  2,193
  3,094
  4,253
  5,709
  7,496
  9,645
  12,183
  15,128
  18,496
  22,294
  26,525
  31,189
  36,280
  41,792
  47,715
  54,039
  60,756
  67,857
  75,333
  83,180
  91,394
  99,973
  108,919
  118,236
  127,929
  138,008
  148,483
Total liabilities and equity, $m
  3,670
  5,638
  8,712
  13,027
  18,903
  26,669
  36,663
  49,213
  64,620
  83,149
  105,025
  130,417
  159,448
  192,188
  228,666
  268,870
  312,760
  360,274
  411,334
  465,856
  523,761
  584,972
  649,424
  717,070
  787,878
  861,837
  938,958
  1,019,273
  1,102,835
  1,189,722
  1,280,028
Debt-to-equity ratio
  5.025
  7.160
  7.320
  7.420
  7.480
  7.520
  7.550
  7.570
  7.580
  7.590
  7.600
  7.600
  7.600
  7.610
  7.610
  7.610
  7.610
  7.610
  7.610
  7.620
  7.620
  7.620
  7.620
  7.620
  7.620
  7.620
  7.620
  7.620
  7.620
  7.620
  7.620
Adjusted equity ratio
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116
  0.116

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  77
  282
  525
  864
  1,323
  1,924
  2,692
  3,650
  4,817
  6,210
  7,845
  9,789
  11,933
  14,339
  17,007
  19,935
  23,119
  26,555
  30,235
  34,155
  38,308
  42,689
  47,295
  52,123
  57,170
  62,437
  67,925
  73,637
  79,578
  85,754
  92,171
Depreciation, amort., depletion, $m
  35
  84
  87
  91
  97
  105
  115
  127
  143
  161
  183
  129
  158
  191
  227
  267
  310
  357
  408
  462
  519
  580
  644
  711
  781
  854
  931
  1,010
  1,093
  1,179
  1,269
Funds from operations, $m
  137
  366
  612
  956
  1,420
  2,029
  2,807
  3,777
  4,959
  6,371
  8,028
  9,918
  12,091
  14,530
  17,234
  20,202
  23,429
  26,912
  30,643
  34,616
  38,827
  43,269
  47,939
  52,834
  57,951
  63,291
  68,856
  74,648
  80,671
  86,933
  93,440
Change in working capital, $m
  7
  -90
  -131
  -184
  -250
  -331
  -426
  -535
  -657
  -790
  -933
  -1,083
  -1,238
  -1,396
  -1,555
  -1,714
  -1,871
  -2,026
  -2,177
  -2,324
  -2,469
  -2,610
  -2,748
  -2,884
  -3,019
  -3,153
  -3,288
  -3,424
  -3,562
  -3,704
  -3,850
Cash from operations, $m
  130
  457
  743
  1,140
  1,670
  2,360
  3,233
  4,312
  5,616
  7,161
  8,960
  11,001
  13,329
  15,926
  18,789
  21,916
  25,301
  28,937
  32,820
  36,941
  41,296
  45,879
  50,687
  55,717
  60,970
  66,444
  72,144
  78,072
  84,234
  90,637
  97,290
Maintenance CAPEX, $m
  0
  -3
  -6
  -9
  -13
  -19
  -26
  -36
  -49
  -64
  -82
  -104
  -129
  -158
  -191
  -227
  -267
  -310
  -357
  -408
  -462
  -519
  -580
  -644
  -711
  -781
  -854
  -931
  -1,010
  -1,093
  -1,179
New CAPEX, $m
  -32
  -57
  -83
  -116
  -158
  -209
  -268
  -337
  -414
  -498
  -588
  -682
  -780
  -880
  -980
  -1,080
  -1,179
  -1,276
  -1,372
  -1,465
  -1,556
  -1,644
  -1,731
  -1,817
  -1,902
  -1,987
  -2,072
  -2,158
  -2,245
  -2,334
  -2,426
Cash from investing activities, $m
  -169
  -60
  -89
  -125
  -171
  -228
  -294
  -373
  -463
  -562
  -670
  -786
  -909
  -1,038
  -1,171
  -1,307
  -1,446
  -1,586
  -1,729
  -1,873
  -2,018
  -2,163
  -2,311
  -2,461
  -2,613
  -2,768
  -2,926
  -3,089
  -3,255
  -3,427
  -3,605
Free cash flow, $m
  -39
  396
  655
  1,015
  1,500
  2,133
  2,938
  3,938
  5,153
  6,599
  8,290
  10,214
  12,420
  14,888
  17,619
  20,609
  23,855
  27,351
  31,091
  35,068
  39,278
  43,715
  48,375
  53,256
  58,357
  63,676
  69,218
  74,983
  80,979
  87,210
  93,685
Issuance/(repayment) of debt, $m
  95
  1,872
  2,716
  3,816
  5,193
  6,865
  8,835
  11,094
  13,620
  16,381
  19,338
  22,447
  25,663
  28,942
  32,246
  35,541
  38,799
  42,002
  45,137
  48,198
  51,188
  54,110
  56,976
  59,799
  62,594
  65,380
  68,175
  70,998
  73,869
  76,807
  79,831
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  43
  1,872
  2,716
  3,816
  5,193
  6,865
  8,835
  11,094
  13,620
  16,381
  19,338
  22,447
  25,663
  28,942
  32,246
  35,541
  38,799
  42,002
  45,137
  48,198
  51,188
  54,110
  56,976
  59,799
  62,594
  65,380
  68,175
  70,998
  73,869
  76,807
  79,831
Total cash flow (excl. dividends), $m
  -4
  2,268
  3,372
  4,831
  6,693
  8,998
  11,773
  15,032
  18,773
  22,980
  27,628
  32,661
  38,083
  43,830
  49,865
  56,150
  62,654
  69,353
  76,228
  83,267
  90,466
  97,825
  105,351
  113,055
  120,951
  129,056
  137,393
  145,982
  154,848
  164,017
  173,516
Retained Cash Flow (-), $m
  37
  -245
  -356
  -501
  -681
  -901
  -1,159
  -1,456
  -1,787
  -2,149
  -2,538
  -2,945
  -3,368
  -3,798
  -4,231
  -4,664
  -5,091
  -5,512
  -5,923
  -6,325
  -6,717
  -7,100
  -7,476
  -7,847
  -8,214
  -8,579
  -8,946
  -9,317
  -9,693
  -10,079
  -10,476
Prev. year cash balance distribution, $m
 
  150
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  2,173
  3,015
  4,330
  6,011
  8,097
  10,614
  13,576
  16,986
  20,831
  25,091
  29,716
  34,715
  40,033
  45,634
  51,486
  57,563
  63,841
  70,305
  76,942
  83,749
  90,725
  97,875
  105,208
  112,737
  120,477
  128,446
  136,665
  145,155
  153,938
  163,040
Discount rate, %
 
  12.60
  13.23
  13.89
  14.59
  15.32
  16.08
  16.89
  17.73
  18.62
  19.55
  20.52
  21.55
  22.63
  23.76
  24.95
  26.19
  27.50
  28.88
  30.32
  31.84
  33.43
  35.10
  36.86
  38.70
  40.64
  42.67
  44.80
  47.04
  49.39
  51.86
PV of cash for distribution, $m
 
  1,930
  2,352
  2,931
  3,487
  3,971
  4,338
  4,555
  4,603
  4,481
  4,209
  3,812
  3,338
  2,823
  2,308
  1,823
  1,392
  1,026
  731
  502
  333
  212
  131
  77
  44
  24
  12
  6
  3
  1
  1
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Encore Capital Group, Inc., through its subsidiaries, is a specialty finance company providing debt recovery solutions for consumers and property owners across a range of financial assets. The Company operates through Portfolio Purchasing and Recovery segment. The Company's geographical segments include the United States, Europe and other. The Company's portfolios of defaulted consumer receivables at discounts and manages them by partnering with individuals as they repay their obligations and work toward financial recovery. Defaulted receivables are consumers' unpaid financial commitments to credit originators, including banks, credit unions, consumer finance companies, commercial retailers, and telecommunication companies. Defaulted receivables also include receivables subject to bankruptcy proceedings. The Company through certain subsidiaries, is engaged in portfolio purchasing and recovery in the United States, including Puerto Rico.

FINANCIAL RATIOS  of  Encore Capital Group (ECPG)

Valuation Ratios
P/E Ratio 13.4
Price to Sales 1
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow 8
Price to Free Cash Flow 10.6
Growth Rates
Sales Growth Rate -8.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 10.3%
Cap. Spend. - 3 Yr. Gr. Rate 19.7%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 502.5%
Total Debt to Equity 502.5%
Interest Coverage 1
Management Effectiveness
Return On Assets 3.2%
Ret/ On Assets - 3 Yr. Avg. 4.1%
Return On Total Capital 2.2%
Ret/ On T. Cap. - 3 Yr. Avg. 2.4%
Return On Equity 13.3%
Return On Equity - 3 Yr. Avg. 12.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 77%
Gross Margin - 3 Yr. Avg. 76.8%
EBITDA Margin 23.3%
EBITDA Margin - 3 Yr. Avg. 24.6%
Operating Margin 23.4%
Oper. Margin - 3 Yr. Avg. 26%
Pre-Tax Margin 5.5%
Pre-Tax Margin - 3 Yr. Avg. 9.3%
Net Profit Margin 7.5%
Net Profit Margin - 3 Yr. Avg. 7.1%
Effective Tax Rate 66.7%
Eff/ Tax Rate - 3 Yr. Avg. 42.9%
Payout Ratio 0%

ECPG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ECPG stock intrinsic value calculation we used $1029 million for the last fiscal year's total revenue generated by Encore Capital Group. The default revenue input number comes from 2016 income statement of Encore Capital Group. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ECPG stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 12.6%, whose default value for ECPG is calculated based on our internal credit rating of Encore Capital Group, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Encore Capital Group.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ECPG stock the variable cost ratio is equal to 59.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $181 million in the base year in the intrinsic value calculation for ECPG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.1% for Encore Capital Group.

Corporate tax rate of 27% is the nominal tax rate for Encore Capital Group. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ECPG stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ECPG are equal to 9.2%.

Life of production assets of 27.1 years is the average useful life of capital assets used in Encore Capital Group operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ECPG is equal to -14.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $559 million for Encore Capital Group - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 26.128 million for Encore Capital Group is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Encore Capital Group at the current share price and the inputted number of shares is $1.1 billion.

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COMPANY NEWS

▶ Encore Capital Group beats Street 4Q forecasts   [Feb-21-18 06:47PM  Associated Press]
▶ 8 Stocks To Play The Mulvaney Era At The CFPB   [Jan-18-18 02:30PM  Benzinga]
▶ [$$] Cabot pulls London IPO   [Nov-16-17 12:20PM  Financial Times]
▶ Encore Capital Group tops Street 3Q forecasts   [Nov-02-17 07:20PM  Associated Press]
▶ Encore Capital Group tops Street 2Q forecasts   [Aug-05-17 01:10AM  Associated Press]
▶ Encore Capital Group misses Street 1Q forecasts   [May-05-17 05:02AM  Associated Press]
▶ New Strong Sell Stocks for March 15th   [Mar-15-17 10:55AM  Zacks]
▶ Encore Capital Group beats Street 4Q forecasts   [06:07PM  Associated Press]
▶ 10 Good Stocks That Are Flying Under the Radar   [Dec-30-16 08:30AM  at Kiplinger]
▶ How Encore Capital Group, Inc. (ECPG) Stacks Up Against Its Peers   [Dec-15-16 09:21PM  at Insider Monkey]
Financial statements of ECPG
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