MeritValue

ENCORE CAPITAL GROUP INC

ECPGdata completeness 88%17 fiscal years on file
The thesis, from the filings

ENCORE CAPITAL GROUP INC earns about 19% on invested capital, far above its ~9% cost of capital, and has bought back 24% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $78.05 and $85.67 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$120.8M1$94.9M2$83.1M3$84.8M3$88.4M3
Net income$350.8M4$194.6M5−$206.5M6−$139.2M6$256.8M6
Operating cash flow$303.1M7$210.7M8$153M9$156.2M9$153.2M9
Capital expenditure$33.4M10$37.2M11$24.8M12$29M12$26.3M12
Free cash flow (derived)$269.7M7$173.5M8$128.2M9$127.2M9$126.9M9
Total debt—————
Cash & equivalents$189.6M13$143.9M14$158.4M15$199.9M16$156.8M16
Diluted shares31.2M26.1M23.7M23.9M23.5M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$415.04
your share of equity
Profit it earned you last year
$109.13
Free cash flow it threw off
$53.93
Debt you’d be carrying
—

10 shares is a claim on $415.04 of net worth that earned you $109.13 and generated $53.93 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
19% avg · 5y
FY21 49%FY22 28%FY23 2%FY24 -13%FY25 31%

It earned about 19% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−24% shares · 5y

Share count is down 24% over 5 years — management has been buying back stock, quietly handing owners a bigger slice.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $78.05 and $85.67 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$78.05
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$127.2M
DCF · Growth Exit 5Y
$83.86
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$127.2M
Earnings Power Value
$85.67
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$194.6M
  • growthAssumed0.0%
Graham Number
$100.94
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $83.86
The three cases
Bear0.0%$83.86
Base0.0%$83.86
Bull5.0%$102.55

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001084961-24-000008 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001084961-25-000011 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001084961-26-000009 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001084961-24-000008 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001084961-25-000011 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001084961-26-000009 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001084961-24-000008 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001084961-25-000011 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001084961-26-000009 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001084961-24-000008 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001084961-25-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001084961-26-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001084961-23-000014 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001084961-24-000008 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001084961-25-000011 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0001084961-26-000009 (CashAndCashEquivalentsAtCarryingValue)