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Geo Group
(NYSE:GEO)
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Rating:77Outperform
Price Target:
$34.00
▲(9.93% Upside)
Action:Reiterated
Date:08/07/26
The score is driven primarily by improved financial fundamentals (stronger profitability and sharply lower leverage) and a notably upbeat earnings call with raised guidance, new contract-driven growth visibility, and continued buybacks. Offsetting factors include uneven free-cash-flow conversion/volatility, only moderate valuation support (P/E ~15.5 with no dividend data), and technicals that suggest consolidation rather than strong near-term momentum.
Positive Factors
Improved Profitability
TTM margins and returns have re‑scaled materially versus prior years, showing healthier operating economics and pricing power under existing contracts. Sustained mid‑teens EBIT margins and double‑digit ROE provide a durable earnings base to fund operations, reinvestment, and capital returns over the next several quarters.
Negative Factors
Free Cash Flow Volatility
Earnings quality is weakened by inconsistent cash conversion: FCF has trailed net income and been volatile, limiting the company's ability to reliably fund capex, activations, or buybacks without drawing on liquidity or asset dispositions. This creates ongoing cash‑cycle risk over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved Profitability
TTM margins and returns have re‑scaled materially versus prior years, showing healthier operating economics and pricing power under existing contracts. Sustained mid‑teens EBIT margins and double‑digit ROE provide a durable earnings base to fund operations, reinvestment, and capital returns over the next several quarters.
Read all positive factors
Geo Group Key Performance Indicators (KPIs)
Any
Revenue by Segment
Details income from different business segments, offering a view into which areas are driving growth and profitability.
Details income from different business segments, offering a view into which areas are driving growth and profitability.
Data provided by:
The Fly
The FlyGeo Group (GEO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.13B
Dividend YieldN/A
Average Volume (3M)2.03M
Price to Earnings (P/E)15.5
Beta (1Y)1.56
Revenue Growth12.74%
EPS Growth919.77%
CountryUS
Employees17,600
SectorIndustrials
Sector Strength72
IndustrySecurity & Protection Services
Share Statistics
EPS (TTM)2.14
Shares Outstanding133,618,290
10 Day Avg. Volume1,497,304
30 Day Avg. Volume2,028,631
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)1.50
Price to Sales (P/S)0.86
P/FCF Ratio-18.04
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$38.33Price Target Upside23.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1.22
Revenue Forecast (FY)$2.98B
Geo Group Business Overview & Revenue Model
Company Description
The GEO Group, Inc. is dedicated to the operation, leasing, and ownership of secure correctional centers, administrative processing hubs, and community reentry facilities situated in the United States, Australia, and South Africa. The company's op...
How the Company Makes Money
GEO makes money primarily by contracting with government agencies to operate and manage correctional and detention facilities and to provide reentry and community-based services. Its core revenue model is service-contract driven: government custom...
Geo Group Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call presented strong operational and financial momentum: solid top-line growth (+15% revenue), outsized net income and EPS gains (63% and 71%), improved adjusted EBITDA (+20%), raised full-year guidance, meaningful new ICE contracts that add significant bed capacity and future revenue, and active share repurchases. Key risks and challenges cited include timing delays for several managed contracts (Florida facilities), a temporary lapse in skip-tracing revenue due to funding disruptions, modest near-term ISAP headcount growth despite favorable device/case mix, higher operating expenses from activations, and uncertainty around potential asset sales to ICE. On balance, positive execution and upgraded guidance substantially outweigh the operational and timing risks described on the call.Positive Updates
Revenue Growth
Second quarter 2026 revenues of approximately $732.1M vs $636.2M in Q2 2025, representing a 15% year-over-year increase driven by 2025 contract wins and facility activations.
Negative Updates
Skip Tracing Contract Revenue Disruption
No revenues recognized from the new skip tracing contract during Q2 2026, attributed to the lapse in ICE appropriations during the government shutdown; ramp expected in H2 2026 but timing uncertain.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Second quarter 2026 revenues of approximately $732.1M vs $636.2M in Q2 2025, representing a 15% year-over-year increase driven by 2025 contract wins and facility activations.
Read all positive updates
Company Guidance
GEO raised 2026 guidance and provided quarterly outlooks: full‑year GAAP net income of $168–175M ($1.27–1.32/sh) on revenues of $2.95–3.05B with adjusted EBITDA of $550–560M and an effective tax rate of ~30% (incl. known discretes); total unreimbursed CapEx of $135–145M for 2026 (expected to drop below $100M in 2027). Quarterly targets are Q3 GAAP net income $45–48M ($0.35–0.37/sh) on revenues $755–805M with adjusted EBITDA $140–145M, and Q4 GAAP net income $37–41M ($0.28–0.31/sh) on revenues $758–808M with adjusted EBITDA $137–142M. Balance sheet and capital return metrics at Q2: $55M cash, $1.54B total debt, ~ $1.5B net debt, net leverage <3x adjusted EBITDA, ~ $300M total available liquidity, repurchased ~1.6M shares for ~$37M in Q2 (10.1M shares/$177M repurchased since Aug‑2025), ~130M shares outstanding and ~$323M remaining under a $500M buyback authorization. Guidance excludes earnings from the new Bighorn and Rivers activations and from the rescheduled Graceville (1.88k beds) and Bay (985 beds) managed contracts (≈$100M combined) and assumes more moderate H2 labor cost savings.Geo Group Financial Statement Overview
Summary
Income Statement
76
Positive
Balance Sheet
88
Very Positive
Cash Flow
55
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.83B | 2.63B | 2.42B | 2.41B | 2.38B | 2.26B |
| Gross Profit | 1.20B | 663.07M | 2.42B | 668.94M | 713.84M | 627.57M |
| EBITDA | 646.96M | 631.09M | 355.44M | 482.12M | 527.29M | 457.46M |
| Net Income | 291.54M | 254.37M | 31.97M | 107.33M | 171.81M | 77.42M |
Balance Sheet | ||||||
| Total Assets | 3.74B | 3.84B | 3.63B | 3.70B | 3.76B | 4.54B |
| Cash, Cash Equivalents and Short-Term Investments | 57.13M | 69.00M | 76.90M | 93.97M | 95.07M | 506.49M |
| Total Debt | 1.61B | 1.73B | 1.81B | 1.89B | 2.07B | 3.06B |
| Total Liabilities | 2.23B | 2.34B | 2.30B | 2.41B | 2.60B | 3.56B |
| Stockholders Equity | 1.52B | 1.51B | 1.33B | 1.29B | 1.17B | 976.21M |
Cash Flow | ||||||
| Free Cash Flow | 161.19M | -124.90M | 163.54M | 211.93M | 206.39M | 213.24M |
| Operating Cash Flow | 355.17M | 72.61M | 242.24M | 284.93M | 296.41M | 282.63M |
| Investing Cash Flow | 114.92M | 105.68M | -101.72M | -60.57M | 2.96M | -53.74M |
| Financing Cash Flow | -465.56M | -185.66M | -168.89M | -208.08M | -699.10M | 11.26M |
Geo Group Technical Analysis
Positive
30.93
Price Trends
29.00
Positive
24.11
Positive
20.03
Positive
Market Momentum
0.54
Positive
54.76
Neutral
54.82
Neutral
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 30.93 is above the 20-day moving average (MA) of 30.61, above the 50-day MA of 29.00, and above the 200-day MA of 20.03, indicating a bullish trend. The MACD of 0.54 indicates Positive momentum. The RSI at 54.76 is Neutral, neither overbought nor oversold. The STOCH value of 54.82 is Neutral, 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 13 risk factors in its most recent earnings report. Geo Group reported the most risks in the "Production" 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $4.44B | 21.38 | 16.46% | 1.04% | 11.11% | 8.52% | |
77 Outperform | $4.13B | 15.52 | 19.30% | ― | 12.74% | 919.77% | |
75 Outperform | $5.58B | 9.92 | 16.83% | 3.13% | 2.10% | 6.68% | |
72 Outperform | $7.35B | 47.57 | 23.15% | 1.22% | 6.48% | 14.55% | |
70 Outperform | $1.32B | 36.00 | 20.86% | 1.62% | 8.83% | -16.34% | |
68 Neutral | $4.88B | 27.42 | 64.68% | 0.84% | 7.31% | 14.99% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GEO
Geo Group
30.69
10.44
51.56%
BRC
Brady
97.02
28.12
40.81%
BCO
Brink's Company
112.19
6.51
6.16%
MSA
MSA Safety
194.19
26.81
16.02%
NSSC
Napco Security Technologies
41.36
12.06
41.17%
ADT
Adt
7.64
-0.48
-5.95%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.