Encore Capital Group
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Encore Capital Group beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share improved significantly.
Gross margins contracted, operating margins dropped, and net margins were steady.
Encore Capital Group logged revenue of $120.7 million. The six analysts polled by S&P Capital IQ anticipated revenue of $118.4 million on the same basis. GAAP reported sales were 21% higher than the prior-year quarter's $99.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.67. The six earnings estimates compiled by S&P Capital IQ anticipated $0.65 per share on the same basis. GAAP EPS of $0.66 for Q4 were 18% higher than the prior-year quarter's $0.56 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 80.7%, 40 basis points worse than the prior-year quarter. Operating margin was 27.1%, 110 basis points worse than the prior-year quarter. Net margin was 14.2%, about the same as the prior-year quarter.
Next quarter's average estimate for revenue is $130.3 million. On the bottom line, the average EPS estimate is $0.68.
Next year's average estimate for revenue is $533.6 million. The average EPS estimate is $2.95.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 78 members out of 88 rating the stock outperform, and 10 members rating it underperform. Among 34 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 32 give Encore Capital Group a green thumbs-up, and two give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Encore Capital Group is outperform, with an average price target of $36.50.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.