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Geo Group (GEO)
NYSE:GEO
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Geo Group
(NYSE:GEO)
63Neutral
Geo Group (GEO) vs. S&P 500 (SPY)
Market Cap
$4.34B
Dividend YieldN/A
Average Volume (3M)2.80M
Price to Earnings (P/E)159.4
Beta (1Y)1.66
Revenue Growth0.44%
EPS Growth-71.78%
CountryUS
Employees16,400
SectorIndustrials
Sector Strength67
IndustryCorporate Services
Share Statistics
EPS (TTM)0.19
Shares Outstanding142,836,400
10 Day Avg. Volume2,595,103
30 Day Avg. Volume2,796,846
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.64
Price to Cash Flow (P/CF)53.70
P/FCF Ratio39.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$44.50Price Target Upside46.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Geo Group Business Overview & Revenue Model
Company DescriptionThe GEO Group, Inc. engages in the ownership, leasing, and management of secure facilities, reentry facilities, and processing centers in the United States, Australia, and South Africa. It operates through four segments: U.S. Secure Services, Electronic Monitoring and Supervision Services, Reentry Services, and International Services. The company provides counseling, education, and treatment for alcohol and drug abuse problems at various facilities; and compliance technologies for monitoring services, and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants. It also offers secure facility management services, including security, administrative, rehabilitation, education, and food services at secure services facilities; reentry services comprising supervision of individuals in community-based programs and reentry centers, and provision of temporary housing, programming, employment assistance, and other services; and supervision and reporting services that improves the participation of non-detained aliens in the immigration court system. In addition, the company provides secure transportation services; and rehabilitation services, such as evidence-based, including cognitive behavioral treatment and post-release services, as well as academic and vocational classes in life skills and treatment programs under the GEO Continuum of Care platform; and develops new facilities based on contract, as well as designs, constructs, and finances the facilities. The GEO Group, Inc. was founded in 1984 and is headquartered in Boca Raton, Florida.
How the Company Makes MoneyThe GEO Group primarily generates revenue through government contracts for the management and operation of correctional and detention facilities. These contracts are typically long-term agreements with federal, state, and local government agencies. The company also earns revenue from the provision of electronic monitoring and community-based rehabilitation services. Key revenue streams include facility management fees, per diem rates for housed individuals, and fees for monitoring and community supervision services. Significant partnerships with government entities and a focus on cost-efficient facility operations contribute to GEO Group's earnings. Additionally, the company's ability to secure new contracts and renew existing agreements is crucial to its financial performance.
Geo Group Financial Statement Overview
Summary
Geo Group's financial health shows resilience in operating cash flow but is challenged by high leverage and declining revenue. The income and cash flow statements indicate potential operational resilience, while the balance sheet shows high leverage risk.Income Statement
Geo Group has faced fluctuating revenue over recent years, with a notable revenue decrease in the latest annual period. Gross and net profit margins have shown inconsistency, though EBIT and EBITDA margins remained relatively steady. The recent decline in revenue and profits suggests challenges in maintaining growth momentum.55
Neutral
Balance Sheet
The balance sheet reflects a high debt-to-equity ratio, indicating significant leverage, which could pose financial risk. Stockholders' equity has been volatile, and the equity ratio shows a reliance on debt. Overall, financial stability is a concern due to high leverage.45
Neutral
Cash Flow
Operating cash flow has been relatively stable, with some fluctuations. However, the free cash flow has decreased recently. The company has maintained positive operating cash flows, but free cash flow trends highlight potential liquidity challenges.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.42B | 2.41B | 2.38B | 2.26B | 2.35B | Gross Profit |
| 2.42B | 668.94M | 713.00M | 627.57M | 571.77M | EBIT |
| 278.75M | 352.39M | 383.10M | 288.08M | 222.57M | EBITDA |
| 355.44M | 482.12M | 516.87M | 423.26M | 385.23M | Net Income Common Stockholders |
| 70.00K | 107.33M | 171.81M | 77.42M | 113.03M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 76.90M | 93.97M | 95.07M | 506.49M | 283.52M | Total Assets |
| 3.63B | 3.70B | 3.76B | 4.54B | 4.46B | Total Debt |
| 1.81B | 1.89B | 2.08B | 3.06B | 3.05B | Net Debt |
| 1.73B | 1.79B | 1.98B | 2.56B | 2.76B | Total Liabilities |
| 2.30B | 2.41B | 2.60B | 3.56B | 3.55B | Stockholders Equity |
| 1.33B | 1.29B | 1.17B | 975.02M | 912.08M |
| Cash Flow | Free Cash Flow | |||
| 163.54M | 211.93M | 206.39M | 213.24M | 332.93M | Operating Cash Flow |
| 242.24M | 284.93M | 296.41M | 282.63M | 441.73M | Investing Cash Flow |
| -101.72M | -60.57M | 2.96M | -53.74M | -104.17M | Financing Cash Flow |
| -168.89M | -208.08M | -699.10M | 11.26M | -96.74M |
Geo Group Technical Analysis
Positive
30.40
Price Trends
28.35
Positive
27.74
Positive
20.87
Positive
Market Momentum
0.67
Negative
58.00
Neutral
88.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GEO, the sentiment is Positive. The current price of 30.4 is above the 20-day moving average (MA) of 26.88, above the 50-day MA of 28.35, and above the 200-day MA of 20.87, indicating a bullish trend. The MACD of 0.67 indicates Negative momentum. The RSI at 58.00 is Neutral, neither overbought nor oversold. The STOCH value of 88.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GEO.
Geo Group Risk Analysis
Geo Group disclosed 59 risk factors in its most recent earnings report. Geo Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Geo Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.21B | 15.71 | 14.41% | 2.69% | -13.19% | 10.03% | |
74 Outperform | $138.95B | 24.48 | 33.10% | 2.07% | 5.05% | 2.73% | |
66 Neutral | $3.00B | 37.57 | 4.46% | 1.97% | 2.81% | -67.57% | |
64 Neutral | $2.24B | 33.25 | 4.64% | ― | 3.43% | 4.64% | |
64 Neutral | $789.26M | 20.13 | 8.25% | ― | 2.65% | 3.34% | |
63 Neutral | $4.34B | 159.41 | 2.08% | ― | 0.44% | -71.78% | |
62 Neutral | $8.27B | 14.02 | 2.58% | 3.08% | 3.83% | -15.91% |
* Industrials Sector Average
Performance Comparison
GEO
Geo Group
29.31
15.05
105.54%
ABM
ABM Industries
48.18
4.42
10.10%
CXW
CoreCivic
20.62
5.08
32.69%
HCSG
Healthcare Services
10.35
-2.14
-17.13%
HON
Honeywell International
210.34
12.53
6.33%
ADT
Adt
8.23
1.93
30.63%
Geo Group Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 17.92% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlights significant revenue potential from new and existing contracts and successful debt reduction strategies. However, increased overhead costs, a decline in electronic monitoring revenues, and uncertain timing of contract awards present notable challenges.Highlights
Record-Breaking Revenue Potential
GEO Group expects the utilization of 17,000 additional beds to generate between $500 million and $600 million in incremental annualized revenues with margins consistent with their secure services facilities.
Long-Term Contract with ICE
Awarded a 15-year fixed-price contract by ICE for the Delaney Hall facility in Newark, New Jersey, expected to generate over $60 million in annualized revenues with a 15-year potential value of approximately $1 billion.
Debt Reduction Progress
The company plans to reduce net debt by $150 million to $175 million in 2025, aiming for a total net debt of approximately $1.55 billion by year-end.
Potential for Increased Monitoring Revenue
Returning to prior ISAP contract utilization levels could generate an incremental $250 million in revenues, with potential for more if participant counts exceed previous highs.
Lowlights
Increased Overhead and Lower Earnings
Fourth-quarter earnings and adjusted EBITDA were below expectations due to higher overhead expenses related to reorganization and professional fees.
Decline in Electronic Monitoring Revenues
Revenue from the electronic monitoring and supervision services segment declined by approximately 10% compared to the previous year's fourth quarter.
Uncertain Timing for New Contracts
Although significant opportunities are anticipated, the timing of new contract awards and facility activations remains uncertain, with significant upside expected only in the latter half of 2025.
Company Guidance
During The GEO Group's Fourth Quarter 2024 Earnings Conference Call, guidance for 2025 was outlined with a focus on significant growth opportunities. The company anticipates investing $38 million to renovate existing facilities, $16 million to increase GPS tracking device production, and $7 million to expand their secure transportation fleet. These investments aim to provide approximately 17,000 additional detention beds, potentially increasing ICE-related service capacity from 15,000 to 32,000 beds. This expansion could generate between $500 million and $600 million in incremental annualized revenues. Additionally, a 15-year contract for the Delaney Hall facility is expected to yield over $60 million annually. Overall, GEO Group forecasts potential upside of $800 million to $1 billion in incremental annualized revenues, with $250 million to $300 million in additional adjusted EBITDA. These projections align with ongoing discussions to activate idle facilities and expand electronic monitoring services under the ISAP program.Geo Group Corporate Events
Business Operations and StrategyFinancial Disclosures
Geo Group Highlights Strategic Focus at Investor Day
Positive
Mar 20, 2025
On March 20, 2025, The GEO Group, Inc. hosted an Investor Day event, highlighting its strategic focus on reducing net debt, exploring options to return capital to shareholders, and investing in expanded service capabilities. The company anticipates unprecedented growth in 2025, driven by opportunities in detention capacity, secure transportation, and electronic monitoring services, which could significantly impact its financial results and stakeholder interests.
Executive/Board Changes
GEO Group Director Andrew Shapiro Resigns for Personal Reasons
Neutral
Jan 13, 2025
Andrew N. Shapiro has resigned from the Board of Directors and all Board committee positions of The GEO Group, Inc. effective January 6, 2025. His resignation was due to personal reasons and did not involve any disagreement with the company or its management, and GEO expressed gratitude for his service.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.