GEO Group Inc (GEO) stock analysis

P/E above its 5-year median

GEO's P/E of 26.2 is above its own 5-year median of 11.5.

P/E above the industry

GEO's P/E of 26.2 is above the Building Construction General Contractors and Operative Builders median of 15.0.

EV/EBITDA above its 5-year median

GEO's EV/EBITDA of 10.9 is above its 5-year median of 8.3.

P/B above the industry

GEO's price-to-book of 2.74 is above the Building Construction General Contractors and Operative Builders median of 1.32.

Trading above fair value

The share price of $32.72 is above our fair value estimate of $18.13.

Margin of safety under 20%

The price is 80.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 3.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 15.9% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -29.9% over the last twelve months, against a 5-year average of 17.6% a year.

Growing faster than the industry

Revenue grew 14.8% over the last twelve months; the Building Construction General Contractors and Operative Builders median is -7.2%.

Guidance lowered

GEO lowered its full year 2026 annual revenues outlook on Aug 6, 2026.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 10.8% over the last twelve months and averaged 10.7% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 9.2%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

GEO's return on equity of 10.8% is above the Building Construction General Contractors and Operative Builders median of 8.1%.

Earnings grew over 5 years

Net income grew 17.6% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 5.7% over the last twelve months, against a 5-year average of 5.2%.

Net margin above the industry

GEO's net margin of 5.7% is above the Building Construction General Contractors and Operative Builders median of 4.0%.

High debt

Debt is 97.3% of shareholders' equity, above the 40% we consider low.

Debt falling against equity

Debt to equity fell from 217% five years ago to 97.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 21.4% of total debt.

Interest not well covered

Operating income covers interest expense 2.5 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.71 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.36; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

GEO has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.