Encore Capital (ECPG) Rallies 53.6% YTD: What's Driving It?
Zacks Investment Research | Dec 04, 2019 08:10PM ET
Shares of Encore Capital Group Inc (NASDAQ:ECPG) have surged nearly 53.6%, year to date, compared with the VGM Score of A. Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best upside potential.
Moreover, Encore Capital has an impressive earnings surprise history. The company surpassed estimates in three of the trailing four quarters, the average beat being15.28%.
While past performance does not guarantee a similar trend in the future, we believe the following factors are adequate to support a steady price appreciation for Encore Capital:
Revenue Strength: The company’s revenues witnessed a CAGR of 6.9% over the last five years (2014-2018). This uptrend is expected to continue in the near term, as its sales growth rates for 2019 and 2020 are projected at 2.7% and 3.8%, respectively.
Earnings Per Share Growth: Encore Capital’s EPS grew 2.1% over the last three-five years. In addition, the company’s projected earnings growth rate of 18.1% and 7.5% for 2019 and 2020, respectively, ensures continuation of this trend. Further, the company’s long-term (three-five years) EPS growth rate of 12% promises reward for investors.
Superior Return on Equity (ROE): Encore Capital’s ROE of 20.9%, compared with the industry average of 13.7%, reflects the company’s commendable position over its peers.
Other Stocks to Consider
Enova International, Inc. (NYSE:ENVA) has been witnessing upward estimate revisions for the past 60 days. Additionally, the stock has jumped more than 18.5%, so far this year. It currently flaunts a Zacks Rank of 1. You can see Zacks Investment Research
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