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Geo Group (GEO)
NYSE:GEO
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Geo Group
(NYSE:GEO)
54Neutral
Geo Group (GEO) vs. S&P 500 (SPY)
Market Cap
$3.31B
Dividend YieldN/A
Average Volume (3M)2.89M
Price to Earnings (P/E)123.8
Beta (1Y)1.73
Revenue Growth0.44%
EPS Growth-71.78%
CountryUS
Employees16,400
SectorIndustrials
Sector Strength69
IndustryCorporate Services
Share Statistics
EPS (TTM)0.19
Shares Outstanding140,379,430
10 Day Avg. Volume3,711,156
30 Day Avg. Volume2,887,452
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.37
Price to Cash Flow (P/CF)44.90
P/FCF Ratio33.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$43.75Price Target Upside68.79% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
Geo Group Business Overview & Revenue Model
Company DescriptionThe GEO Group, Inc. is a real estate investment trust, which specializes in the ownership, lease, and management of correctional, detention, and re-entry facilities. It operates through the following segments: U.S. Corrections and Detention; GEO Care; International Services; and Facility Construction and Design. The U.S. Corrections and Detention segment encompasses United States based public-private partnership corrections and detention business. The GEO Care segment consists of community-based services business, youth services business, and electronic monitoring and supervision service. The International Services segment includes detention operations in South Africa, Australia, and the United Kingdom. The Facility Construction and Design segment contracts with states, local, federal agencies, and international agencies for the design and construction of buildings. The company was founded by George C. Zoley in 1984 and is headquartered in Boca Raton, FL.
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
Neutral
25.92
Price Trends
28.73
Negative
26.21
Negative
20.03
Positive
Market Momentum
-1.16
Positive
46.83
Neutral
31.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GEO, the sentiment is Neutral. The current price of 25.92 is below the 20-day moving average (MA) of 26.11, below the 50-day MA of 28.73, and above the 200-day MA of 20.03, indicating a neutral trend. The MACD of -1.16 indicates Positive momentum. The RSI at 46.83 is Neutral, neither overbought nor oversold. The STOCH value of 31.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GEO.
Geo Group Risk Analysis
Geo Group disclosed 61 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 | $6.64B | 14.79 | 14.41% | 2.91% | -13.19% | 10.03% | |
68 Neutral | $135.33B | 23.96 | 33.10% | 2.12% | 5.05% | 2.73% | |
64 Neutral | $810.57M | 20.28 | 8.25% | ― | 2.65% | 3.34% | |
62 Neutral | $8.17B | 12.83 | 0.26% | 3.07% | 3.83% | -16.44% | |
60 Neutral | $3.10B | 38.93 | 4.55% | 1.89% | 3.25% | -66.29% | |
58 Neutral | $2.04B | 32.39 | 4.64% | ― | 3.43% | 4.64% | |
54 Neutral | $3.31B | 123.81 | 2.08% | ― | 0.44% | -71.78% |
* Industrials Sector Average
Performance Comparison
GEO
Geo Group
25.92
13.44
107.69%
ABM
ABM Industries
45.51
4.61
11.27%
CXW
CoreCivic
19.86
5.28
36.21%
HCSG
Healthcare Services
10.82
-1.30
-10.73%
HON
Honeywell International
206.35
14.08
7.32%
ADT
Adt
7.52
0.90
13.60%
Geo Group Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.54% | 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
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.
Executive/Board ChangesBusiness Operations and Strategy
Geo Group Invests $70M and Appoints New CEO
Positive
Dec 16, 2024
The GEO Group announced a $70 million investment to enhance its services for U.S. Immigration and Customs Enforcement (ICE), intending to expand detention capacity and improve secure transportation and electronic monitoring services. The company also introduced leadership changes with Brian Evans retiring as CEO, replaced by J. David Donahue, a seasoned professional in corrections and detention. These developments aim to position GEO for future growth and reduce debt through potential sales of underperforming facilities.
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.