Encore Capital Group, Inc. (ECPG) just set a new 52-week high following the recent earnings report, which topped expectations.
Company Description
Encore, through its subsidiaries, buys and manages consumer receivable portfolios.
Collections up 29%
On Oct 28 the company released third-quarter results that included a 29% increase in gross collections, to $125.7 million. Revenue from receivables was up 22% to $76.4 million.
Net income tripled to $9.0 million, or 37 cents per share. One year ago EPS was just 13 cents. Coming into the report the Zacks Consensus Estimate for the quarter was just 28 cents, making it an earnings surprise of 32%.
Estiamtes Spike
As a result of the announcement analysts have raised forecasts. The Zacks Consensus Estimate for this year and the next are both up. Estimates for 2009 are averaging $1.34, up from $1.13.
Projections for 2010 are now averaging $1.63, up from $1.39. These levels represent year-over-year growth of 67% and 22%, respectively.
Solid Value
One share of ECPG is priced at just over 12 times forward earnings right now. The PEG ratio is a fair 1.0 times, compared to the industry average of 3.3 times.
The Chart
The stock went soaring after the late-October earnings release. Another positive aspect is that volume was higher for more than a week after the report, giving stability to the new level. Take a look at the chart below.
