Looking Into Encore Capital Gr's Return On Invested Capital

According to Benzinga Pro, during Q1, Encore Capital Gr ECPG earned $175.75 million, a 131.0% increase from the preceding quarter. Encore Capital Gr also posted a total of $499.68 million in sales, a 39.85% increase since Q4. Encore Capital Gr earned $76.08 million, and sales totaled $357.30 million in Q4.

Why Is ROIC Significant?

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q1, Encore Capital Gr posted an ROIC of 6.35%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

Return on Invested Capital is a measure of yearly pre-tax profit relative to capital invested by a business. Changes in earnings and sales indicate shifts in a company's ROIC. A higher ROIC is generally representative of successful growth of a company and is a sign of higher earnings per share in the future. A low or negative ROIC suggests the opposite. In Q1, Encore Capital Gr posted an ROIC of 6.35%.

Keep in mind, while ROIC is a good measure of a company's recent performance, it is not a highly reliable predictor of a company's earnings or sales in the near future.

For Encore Capital Gr, the positive return on invested capital ratio of 6.35% suggests that management is allocating their capital effectively. Effective capital allocation is a positive indicator that a company will achieve more durable success and favorable long-term returns.

Analyst Predictions

Encore Capital Gr reported Q1 earnings per share at $6.4/share, which beat analyst predictions of $2.03/share.

This article was generated by Benzinga's automated content engine and reviewed by an editor.