Encore Capital Group, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
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Investors in Encore Capital Group, Inc. (NASDAQ:ECPG) had a good week, as its shares rose 9.1% to close at US$49.97 following the release of its quarterly results. It was not a great result overall. While revenues of US$367m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 16% to hit US$1.26 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Encore Capital Group
After the latest results, the five analysts covering Encore Capital Group are now predicting revenues of US$1.61b in 2025. If met, this would reflect a sizeable 21% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Encore Capital Group forecast to report a statutory profit of US$7.57 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.60b and earnings per share (EPS) of US$8.25 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$62.25, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Encore Capital Group at US$65.00 per share, while the most bearish prices it at US$58.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Encore Capital Group is an easy business to forecast or the the analysts are all using similar assumptions.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Encore Capital Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 17% annualised growth until the end of 2025. If achieved, this would be a much better result than the 3.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 11% per year. So it looks like Encore Capital Group is expected to grow faster than its competitors, at least for a while.