Encore Capital’s Rally Meets Concerns Over Growth and Debt
StockStory says five-year revenue growth and a high debt burden weigh on its view of Encore Capital Group after a strong share-price run.
Key takeaways
- StockStory cited 3.1% annualized revenue growth over five years and average return on equity of 7%.
- The company reported $4.18 billion of debt and a 5.4× net-debt-to-EBITDA ratio.
StockStory argued that Encore Capital Group’s recent share-price gains do not outweigh concerns about its growth and debt. The publisher said the shares had risen 32.2% over six months, reaching $95.89.
The analysis cited annualized revenue growth of 3.1% over five years and average return on equity of 7% during the same period. It compared the latter with an approximately 10% sector average.
Encore reported $182.9 million in cash and $4.18 billion in debt in its most recent quarter. StockStory also pointed to a 5.4× net-debt-to-EBITDA ratio, which it viewed as a risk.
This article was produced with the help of AI technology. Source: Yahoo Finance
