The GEO Group, Inc.
The GEO Group, Inc. Fundamental Analysis
The GEO Group, Inc. (GEO) shows moderate financial fundamentals with a PE ratio of 7.89, profit margin of 9.67%, and ROE of 17.69%. The company generates $2.7B in annual revenue with weak year-over-year growth of 0.44%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 42.6/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze GEO's fundamental strength across five key dimensions:
Efficiency Score
WeakGEO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentGEO trades at attractive valuation levels.
Growth Score
WeakGEO faces weak or negative growth trends.
Financial Health Score
ModerateGEO shows balanced financial health with some risks.
Profitability Score
WeakGEO struggles to sustain strong margins.
Key Financial Metrics
Is GEO Expensive or Cheap?
P/E Ratio
GEO trades at 7.89 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, GEO's PEG of 1.13 indicates fair valuation.
Price to Book
The market values The GEO Group, Inc. at 1.33 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 0.62 times EBITDA. This is generally considered low.
How Well Does GEO Make Money?
Net Profit Margin
For every $100 in sales, The GEO Group, Inc. keeps $9.67 as profit after all expenses.
Operating Margin
Core operations generate 9.79 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $17.69 in profit for every $100 of shareholder equity.
ROA
The GEO Group, Inc. generates $6.62 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
The GEO Group, Inc. generates limited operating cash flow of $73.18M, signaling weaker underlying cash strength.
Free Cash Flow
The GEO Group, Inc. generates weak or negative free cash flow of $-125.88M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.90 in free cash annually.
FCF Yield
GEO converts -6.17% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
7.89
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.13
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.33
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.77
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.15
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.01
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.18
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How GEO Stacks Against Its Sector Peers
| Metric | GEO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 7.89 | 25.83 | Better (Cheaper) |
| ROE | 17.69% | 1278.00% | Weak |
| Net Margin | 9.67% | -43774.00% (disorted) | Weak |
| Debt/Equity | 1.15 | 0.80 | Weak (High Leverage) |
| Current Ratio | 2.01 | 10.63 | Strong Liquidity |
| ROA | 6.62% | -1539613.00% (disorted) | Weak |
GEO outperforms its industry in 2 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews The GEO Group, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-11.29%
Industry Style: Cyclical, Value, Infrastructure
DecliningEPS CAGR
-82.60%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
-35.03%
Industry Style: Cyclical, Value, Infrastructure
Declining