Analysts rate Geo Group Inc. (GEO:NYE) with a Strong Buy rating and a $10 target

STA Research
by: STA Research
Geo Stock

Based on the Geo Group stock forecast from 1 analyst, the average analyst Geo stock price target is USD 10.00 over the next 12 months. Geo Group Inc’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of Geo stock forecast is Slightly Bullish, which is based on 10 positive signals and 7 negative signals. At the last closing, Geo Group stock price was USD 8.12Geo Group stock price has changed by +0.00% over the past week, +1.25% over the past month and +14.37% over the last year.

About Geo Group Inc. (GEO:NYE):

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.

 

What we like:

Low volatility:

The stock’s annual returns have been stable and consistent compared to its sector peers (for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.

Superior total returns:

The stock has outperformed its sector peers on average annual total returns basis in the past 5 years (for a hold period of at least 12 months) and is in the top quartile.

Underpriced compared to earnings:

Geo stock is trading low compared to its peers on a price to earning basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Underpriced compared to book value:

Geo stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Underpriced on cashflow basis:

Geo stock is trading low compared to its peers on a price to cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Superior return on assets:

The company management has delivered better return on assets in the most recent 4 quarters than its peers, placing it in the top quartile.

Positive cash flow:

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow:

The company had positive total free cash flow in the most recent four quarters.

Underpriced on free cash flow basis:

Geo Group stock is trading low compared to its peers on a price to free cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

High Gross Profit to Asset Ratio:

Geo Group stock is in the top quartile compared to its peers on Gross Profit to Asset Ratio. This is a popular measure among value investors for showing superior returns in the long run.

 

What we don’t like:

Low market capitalization:

This is among the smaller entities in its sectors with below median market capitalization. That may make it less stable in the long run unless it has a unique technology or market which can help it grow or get acquired in future.

Poor risk adjusted returns:

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns, the returns are unpredictable. Proceed with caution.

Below median dividend returns:

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Highly leveraged:

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the stock forecast and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Low Earnings Growth:

Geo Group stock has shown below median earnings growth in the previous 5 years compared to its sector

Low Revenue Growth:

Geo Group stock has shown below median revenue growth in the previous 5 years compared to its sector

Low Dividend Growth:

Geo Group stock has shown below median dividend growth in the previous 5 years compared to its sector.

Disclaimer

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