Update shared on 23 Nov 2025
Fair value Decreased 5.84%Analysts have lowered their price target for GEO Group from $34.25 to $32.25. They cite revised estimates that reflect slower-than-expected growth, although there remains continued optimism around new contract opportunities and segment performance.
Analyst Commentary
Analyst perspectives on GEO Group reflect a mix of optimism around long-term growth potential and caution regarding recent performance trends. Key observations include the following:
Bullish Takeaways
- Analysts highlight a clear pathway toward surpassing $3 billion in annualized revenue by fiscal year 2026, driven by new contract wins and expansion in monitoring services.
- There is particular optimism around the company’s Intensive Supervision Appearance Program, which is viewed as a significant growth driver across all operating segments.
- Long-term segment performance is seen as resilient, with continued opportunities for the company to capitalize on favorable contract renewals and expansions.
Bearish Takeaways
- Revised estimates indicate slower than anticipated growth, prompting reductions in price targets and more cautious short-term outlooks.
- Execution risks related to the onboarding and ramp-up of major contracts remain a concern, potentially impacting near-term revenue realization.
- Volatility in project timing and implementation may create uncertainty for valuation, limiting upside until tangible progress is demonstrated.
What's in the News
- GEO Group updated its financial guidance for the fourth quarter and full year 2025, now expecting Q4 net income of $0.23 to $0.27 per diluted share on $651 million to $676 million in quarterly revenue. Full year net income is projected at $1.81 to $1.85 per diluted share. (Key Developments)
- The company entered a joint venture agreement to manage the North Florida Detention Facility, a 1,310-bed center in Baker County, Florida. (Key Developments)
- The Florida Department of Corrections has issued Notices of Intent to Award three managed-only contracts to GEO Group for correctional and rehabilitation facilities. These contracts are projected to generate approximately $130 million in annualized revenues, with about $100 million in new incremental revenue. (Key Developments)
Valuation Changes
- Consensus Analyst Price Target has decreased from $34.25 to $32.25, reflecting a more cautious outlook.
- Discount Rate has risen slightly, moving from 8.22 percent to 8.27 percent. This indicates increased risk assumptions.
- Revenue Growth expectations are largely unchanged, with a marginal increase from 9.32 percent to 9.34 percent.
- Net Profit Margin has fallen significantly from 9.98 percent to 5.08 percent. This suggests lower projected profitability.
- Future P/E has increased from 19.08x to 33.10x, indicating higher valuation multiples relative to lowered earnings expectations.
Disclaimer
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