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GEO

GEO Group NYSE:GEO Stock Report

Last Price

US$6.60

Market Cap

US$795.0m

7D

2.0%

1Y

-8.8%

Updated

30 Jun, 2022

Data

Company Financials +
GEO fundamental analysis
Snowflake Score
Valuation6/6
Future Growth3/6
Past Performance1/6
Financial Health1/6
Dividends0/6

GEO Stock Overview

The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom.

Rewards

Trading at 63.8% below our estimate of its fair value

Earnings are forecast to grow 28.1% per year

Risk Analysis

Interest payments are not well covered by earnings

Profit margins (2.4%) are lower than last year (5.9%)


GEO Group Competitors

CoreCivic

NYSE:CXW

US$1.3b

Brink's

NYSE:BCO

US$2.9b

Interface

NasdaqGS:TILE

US$745.7m

Deluxe

NYSE:DLX

US$931.6m

Price History & Performance

Summary of all time highs, changes and price drops for GEO Group
Historical stock prices
Current Share PriceUS$6.60
52 Week HighUS$9.81
52 Week LowUS$5.21
Beta0.65
1 Month Change-7.17%
3 Month Change-0.60%
1 Year Change-8.84%
3 Year Change-68.35%
5 Year Change-77.18%
Change since IPO560.00%

Recent News & Updates

Jun 09
GEO Group (NYSE:GEO) Takes On Some Risk With Its Use Of Debt

GEO Group (NYSE:GEO) Takes On Some Risk With Its Use Of Debt

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

May 08

GEO Group: Amend-And-Extend Is In Sight

On May 2, GEO announced that a final definitive agreement has not been reached with the creditor ad hoc groups. Major terms of the proposed amend-and-extend transaction were agreed upon, however. GEO is expected to enter into a new non-disclosure agreement with the creditor ad hoc group to finalize an agreement. I will discuss the proposed transaction and the treatment of each security.

Shareholder Returns

GEOUS Commercial ServicesUS Market
7D2.0%2.5%-0.6%
1Y-8.8%-8.4%-21.7%

Return vs Industry: GEO matched the US Commercial Services industry which returned -8.2% over the past year.

Return vs Market: GEO exceeded the US Market which returned -20.8% over the past year.

Price Volatility

Is GEO's price volatile compared to industry and market?
GEO volatility
GEO Average Weekly Movement7.5%
Commercial Services Industry Average Movement7.3%
Market Average Movement8.0%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.2%

Stable Share Price: GEO is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: GEO's weekly volatility (7%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
198415,800Jose Gordohttps://www.geogroup.com

The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.

GEO Group Fundamentals Summary

How do GEO Group's earnings and revenue compare to its market cap?
GEO fundamental statistics
Market CapUS$795.00m
Earnings (TTM)US$52.99m
Revenue (TTM)US$2.23b

15.0x

P/E Ratio

0.4x

P/S Ratio

Is GEO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
GEO income statement (TTM)
RevenueUS$2.23b
Cost of RevenueUS$1.59b
Gross ProfitUS$645.36m
Other ExpensesUS$592.38m
EarningsUS$52.99m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.44
Gross Margin28.92%
Net Profit Margin2.37%
Debt/Equity Ratio288.8%

How did GEO perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is GEO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for GEO?

Other financial metrics that can be useful for relative valuation.

GEO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.5x
Enterprise Value/EBITDA7.2x
PEG Ratio0.5x

Price to Earnings Ratio vs Peers

How does GEO's PE Ratio compare to its peers?

GEO PE Ratio vs Peers
The above table shows the PE ratio for GEO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average15.9x
CXW CoreCivic
14.2x14.3%US$1.3b
BCO Brink's
17.6xn/aUS$2.9b
TILE Interface
12.2x15.8%US$745.7m
DLX Deluxe
19.4x23.3%US$931.6m
GEO GEO Group
15x28.1%US$795.0m

Price-To-Earnings vs Peers: GEO is good value based on its Price-To-Earnings Ratio (15x) compared to the peer average (15.9x).

Price to Earnings Ratio vs Industry

How does GEO's PE Ratio compare vs other companies in the US Commercial Services Industry?

Price-To-Earnings vs Industry: GEO is good value based on its Price-To-Earnings Ratio (15x) compared to the US Commercial Services industry average (21x)

Price to Earnings Ratio vs Fair Ratio

What is GEO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

GEO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio15x
Fair PE Ratio25.7x

Price-To-Earnings vs Fair Ratio: GEO is good value based on its Price-To-Earnings Ratio (15x) compared to the estimated Fair Price-To-Earnings Ratio (25.7x).

Share Price vs Fair Value

What is the Fair Price of GEO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GEO ($6.6) is trading below our estimate of fair value ($18.24)

Significantly Below Fair Value: GEO is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: GEO is good value based on its PEG Ratio (0.5x)

Discover undervalued companies

Future Growth

How is GEO Group forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE

28.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: GEO's forecast earnings growth (28.1% per year) is above the savings rate (1.9%).

Earnings vs Market: GEO's earnings (28.1% per year) are forecast to grow faster than the US market (13.7% per year).

High Growth Earnings: GEO's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: GEO's revenue (0.4% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: GEO's revenue (0.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if GEO's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has GEO Group performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE

-9.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GEO has high quality earnings.

Growing Profit Margin: GEO's current net profit margins (2.4%) are lower than last year (5.9%).

Past Earnings Growth Analysis

Earnings Trend: GEO's earnings have declined by 9.1% per year over the past 5 years.

Accelerating Growth: GEO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: GEO had negative earnings growth (-61.3%) over the past year, making it difficult to compare to the Commercial Services industry average (25.7%).

Return on Equity

High ROE: GEO's Return on Equity (6.4%) is considered low.

Discover strong past performing companies

Financial Health

How is GEO Group's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: GEO's short term assets ($1.0B) exceed its short term liabilities ($408.4M).

Long Term Liabilities: GEO's short term assets ($1.0B) do not cover its long term liabilities ($3.2B).

Debt to Equity History and Analysis

Debt Level: GEO's net debt to equity ratio (230.2%) is considered high.

Reducing Debt: GEO's debt to equity ratio has increased from 207.8% to 288.8% over the past 5 years.

Debt Coverage: GEO's debt is not well covered by operating cash flow (9.5%).

Interest Coverage: GEO's interest payments on its debt are not well covered by EBIT (3x coverage).

Balance Sheet

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Dividend

What is GEO Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate GEO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate GEO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if GEO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if GEO's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: GEO is not paying a notable dividend for the US market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as GEO has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.9yrs

Average management tenure

CEO

Jose Gordo (47 yo)

0.92

Tenure

US$2,051,207

Compensation

Mr. Jose Gordo, J.D., serves as Chief Executive Officer at GEO Group, Inc. since July 1, 2021. He is the Co-founder of Southcap Partners. Mr. Gordo served as Treasurer at magicJack VocalTec Ltd.until May...

CEO Compensation Analysis

Compensation vs Market: Jose's total compensation ($USD2.05M) is below average for companies of similar size in the US market ($USD4.00M).

Compensation vs Earnings: Jose's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: GEO's management team is seasoned and experienced (7.9 years average tenure).

Board Members

Experienced Board: GEO's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Company Information

The GEO Group, Inc.'s employee growth, exchange listings and data sources

Key Information

  • Name: The GEO Group, Inc.
  • Ticker: GEO
  • Exchange: NYSE
  • Founded: 1984
  • Industry: Security and Alarm Services
  • Sector: Commercial Services
  • Implied Market Cap: US$794.997m
  • Shares outstanding: 120.45m
  • Website: https://www.geogroup.com

Number of Employees

Location

  • The GEO Group, Inc.
  • 4955 Technology Way
  • Boca Raton
  • Florida
  • 33431
  • United States

Listings

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/30 00:00
End of Day Share Price2022/06/30 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.