Update shared on 08 Nov 2025
Fair value Decreased 12%Analysts have lowered their price target for GEO Group from $39 to $34.25 per share, citing slower-than-expected revenue growth and profit margins based on recent research updates. However, they remain optimistic about the company's long-term opportunities.
Analyst Commentary
Recent research notes have highlighted both optimistic and cautious perspectives on GEO Group's outlook. While the price target was revised downward, analysts continue to recognize both potential growth drivers and key concerns for the company's future performance.
Bullish Takeaways- Bullish analysts point to the company's progress toward surpassing $3 billion in annualized revenue, supported by new contracts and expanded monitoring operations projected for fiscal year 2026.
- There is notable confidence in the growth potential of GEO's Intensive Supervision Appearance Program, which is viewed as a significant opportunity for expansion and margin improvement.
- Optimists remain encouraged by the company's diversified business segments, which are seen as offering multiple avenues for future growth.
- The Buy rating has been maintained. This reflects a belief that long-term execution could exceed near-term expectations and drive upside in valuation over time.
- Bearish analysts express caution due to slower than expected revenue and profit margin growth, which has led to downward revisions in financial estimates.
- The timeline for contract ramp-ups is viewed as uncertain. Any delays could put pressure on projected financial targets for 2026 and beyond.
- There are concerns that the anticipated revenue from upcoming contracts and monitoring initiatives may take longer to materialize than initially forecast.
- Execution risk remains a factor, particularly as the company seeks to deliver on ambitious growth targets across multiple new and existing segments.
What's in the News
- GEO Group updated its financial guidance, projecting fourth quarter 2025 GAAP net income of $0.23 to $0.27 per diluted share on revenues of $651 million to $676 million, and full year 2025 GAAP net income of $1.81 to $1.85 per share on annual revenues of around $2.6 billion. (Corporate Guidance)
- The company entered a joint venture to provide management services at the 1,310-bed North Florida Detention Facility in Baker County, Florida. (Strategic Alliances)
- The Florida Department of Corrections awarded GEO three managed-only contracts for facilities totaling over 3,800 beds. These contracts are expected to generate about $130 million in annualized revenues, including $100 million in new incremental annualized revenue, starting July 2026. The contracts have an initial term of three years, with unlimited two-year renewal options. (Client Announcements)
Valuation Changes
- Consensus Analyst Price Target: Lowered from $39 to $34.25 per share. This reflects a notable decrease in fair value estimates.
- Discount Rate: Increased from 7.87 percent to 8.22 percent. This indicates a higher perceived risk profile for the company.
- Revenue Growth: Reduced sharply from 15.36 percent to 9.32 percent. This signifies more conservative expectations for future growth.
- Net Profit Margin: Revised downward from 15.18 percent to 9.98 percent. This signals less optimistic projections for profitability.
- Future P/E: Adjusted upward from 12.59x to 19.08x. This suggests a higher valuation multiple despite lower growth and profit expectations.
Disclaimer
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