GEO GROUP INC/THE (GEO) Stock Fundamental Analysis
NYSE:GEO - New York Stock Exchange, Inc. - US36162J1060 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to GEO. GEO was compared to 83 industry peers in the Commercial Services & Supplies industry. There are concerns on the financial health of GEO while its profitability can be described as average. GEO is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year GEO was profitable.
GEO had a positive operating cash flow in the past year.
In the past 5 years GEO has always been profitable.
Each year in the past 5 years GEO had a positive operating cash flow.
1.2 Ratios
GEO's Return On Assets of 1.36% is in line compared to the rest of the industry. GEO outperforms 50.60% of its industry peers.
GEO has a Return On Equity of 3.68%. This is comparable to the rest of the industry: GEO outperforms 55.42% of its industry peers.
GEO's Return On Invested Capital of 8.58% is fine compared to the rest of the industry. GEO outperforms 68.67% of its industry peers.
GEO had an Average Return On Invested Capital over the past 3 years of 7.94%. This is below the industry average of 10.89%.
The last Return On Invested Capital (8.58%) for GEO is above the 3 year average (7.94%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 3.68% | ||
| ROIC | 8.58% |
ROA(3y)2.34%
ROA(5y)2.22%
ROE(3y)7.12%
ROE(5y)8.19%
ROIC(3y)7.94%
ROIC(5y)6.71%
1.3 Margins
Looking at the Profit Margin, with a value of 1.63%, GEO is in line with its industry, outperforming 53.01% of the companies in the same industry.
GEO's Profit Margin has declined in the last couple of years.
GEO has a Operating Margin of 12.25%. This is in the better half of the industry: GEO outperforms 79.52% of its industry peers.
In the last couple of years the Operating Margin of GEO has remained more or less at the same level.
GEO has a Gross Margin (26.42%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of GEO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.25% | ||
| PM (TTM) | 1.63% | ||
| GM | 26.42% |
OM growth 3Y0.06%
OM growth 5Y1.08%
PM growth 3Y-26.63%
PM growth 5Y-28.78%
GM growth 3Y-1.24%
GM growth 5Y1.46%
2. Health
2.1 Basic Checks
GEO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for GEO has been increased compared to 1 year ago.
Compared to 5 years ago, GEO has more shares outstanding
Compared to 1 year ago, GEO has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.25 indicates that GEO is not a great score, but indicates only limited risk for bankruptcy at the moment.
GEO's Altman-Z score of 2.25 is in line compared to the rest of the industry. GEO outperforms 48.19% of its industry peers.
The Debt to FCF ratio of GEO is 12.66, which is on the high side as it means it would take GEO, 12.66 years of fcf income to pay off all of its debts.
GEO's Debt to FCF ratio of 12.66 is in line compared to the rest of the industry. GEO outperforms 50.60% of its industry peers.
A Debt/Equity ratio of 1.23 is on the high side and indicates that GEO has dependencies on debt financing.
GEO has a Debt to Equity ratio of 1.23. This is in the lower half of the industry: GEO underperforms 71.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | 12.66 | ||
| Altman-Z | 2.25 |
ROIC/WACC0.95
WACC9.04%
2.3 Liquidity
A Current Ratio of 1.29 indicates that GEO should not have too much problems paying its short term obligations.
GEO has a Current ratio of 1.29. This is in the lower half of the industry: GEO underperforms 63.86% of its industry peers.
A Quick Ratio of 1.29 indicates that GEO should not have too much problems paying its short term obligations.
GEO has a Quick ratio (1.29) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
The earnings per share for GEO have decreased strongly by -17.44% in the last year.
GEO shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -30.77% yearly.
Looking at the last year, GEO shows a very strong growth in Revenue. The Revenue has grown by 25.62%.
Measured over the past years, GEO shows a decrease in Revenue. The Revenue has been decreasing by -0.44% on average per year.
EPS 1Y (TTM)-17.44%
EPS 3Y-19.54%
EPS 5Y-30.77%
EPS Q2Q%-22.22%
Revenue 1Y (TTM)25.62%
Revenue growth 3Y2.41%
Revenue growth 5Y-0.44%
Sales Q2Q%-0.17%
3.2 Future
The Earnings Per Share is expected to grow by 80.06% on average over the next years. This is a very strong growth
GEO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.76% yearly.
EPS Next Y33.59%
EPS Next 2Y80.06%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year8.01%
Revenue Next 2Y17.76%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 37.79, the valuation of GEO can be described as expensive.
GEO's Price/Earnings is on the same level as the industry average.
GEO is valuated rather expensively when we compare the Price/Earnings ratio to 25.82, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 11.03 indicates a reasonable valuation of GEO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GEO indicates a rather cheap valuation: GEO is cheaper than 84.34% of the companies listed in the same industry.
GEO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.79 | ||
| Fwd PE | 11.03 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GEO is valued a bit cheaper than 62.65% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GEO is valued a bit cheaper than the industry average as 62.65% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.82 | ||
| EV/EBITDA | 11.02 |
4.3 Compensation for Growth
GEO's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
GEO's earnings are expected to grow with 80.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.13
PEG (5Y)N/A
EPS Next 2Y80.06%
EPS Next 3YN/A
5. Dividend
5.1 Amount
GEO does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
26.83
-0.25 (-0.92%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners88.5%
Inst Owner Change5.72%
Ins Owners1.55%
Ins Owner Change8.84%
Market Cap3.83B
Analysts82.5
Price Target45.7 (70.33%)
Short Float %8.35%
Short Ratio3.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-33.9%
Min EPS beat(2)-44.81%
Max EPS beat(2)-22.99%
EPS beat(4)1
Avg EPS beat(4)-11%
Min EPS beat(4)-44.81%
Max EPS beat(4)38.86%
EPS beat(8)2
Avg EPS beat(8)1.11%
EPS beat(12)4
Avg EPS beat(12)-0.53%
EPS beat(16)8
Avg EPS beat(16)9.22%
Revenue beat(2)0
Avg Revenue beat(2)-1.55%
Min Revenue beat(2)-2.15%
Max Revenue beat(2)-0.95%
Revenue beat(4)0
Avg Revenue beat(4)-1.69%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)-0.95%
Revenue beat(8)2
Avg Revenue beat(8)-0.81%
Revenue beat(12)5
Avg Revenue beat(12)-0.08%
Revenue beat(16)6
Avg Revenue beat(16)-0.2%
PT rev (1m)0%
PT rev (3m)21.08%
EPS NQ rev (1m)-23.34%
EPS NQ rev (3m)-47.03%
EPS NY rev (1m)-16.09%
EPS NY rev (3m)-37.29%
Revenue NQ rev (1m)-2.58%
Revenue NQ rev (3m)-6.82%
Revenue NY rev (1m)-1.67%
Revenue NY rev (3m)-5.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 37.79 | ||
| Fwd PE | 11.03 | ||
| P/S | 1.27 | ||
| P/FCF | 28.82 | ||
| P/OCF | 16.83 | ||
| P/B | 2.85 | ||
| P/tB | 8.28 | ||
| EV/EBITDA | 11.02 |
EPS(TTM)0.71
EY2.65%
EPS(NY)2.43
Fwd EY9.06%
FCF(TTM)0.93
FCFY3.47%
OCF(TTM)1.59
OCFY5.94%
SpS21.2
BVpS9.4
TBVpS3.24
PEG (NY)1.13
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.36% | ||
| ROE | 3.68% | ||
| ROCE | 11.44% | ||
| ROIC | 8.58% | ||
| ROICexc | 8.75% | ||
| ROICexgc | 12.1% | ||
| OM | 12.25% | ||
| PM (TTM) | 1.63% | ||
| GM | 26.42% | ||
| FCFM | 4.39% |
ROA(3y)2.34%
ROA(5y)2.22%
ROE(3y)7.12%
ROE(5y)8.19%
ROIC(3y)7.94%
ROIC(5y)6.71%
ROICexc(3y)8.16%
ROICexc(5y)7.05%
ROICexgc(3y)11.32%
ROICexgc(5y)9.67%
ROCE(3y)10.59%
ROCE(5y)8.94%
ROICexcg growth 3Y8%
ROICexcg growth 5Y5.13%
ROICexc growth 3Y6.92%
ROICexc growth 5Y4.53%
OM growth 3Y0.06%
OM growth 5Y1.08%
PM growth 3Y-26.63%
PM growth 5Y-28.78%
GM growth 3Y-1.24%
GM growth 5Y1.46%
F-Score6
Asset Turnover0.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | 12.66 | ||
| Debt/EBITDA | 3.33 | ||
| Cap/Depr | 74.57% | ||
| Cap/Sales | 3.13% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 45.72% | ||
| Profit Quality | 269.06% | ||
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z | 2.25 |
F-Score6
WACC9.04%
ROIC/WACC0.95
Cap/Depr(3y)62.7%
Cap/Depr(5y)64.04%
Cap/Sales(3y)3.35%
Cap/Sales(5y)3.55%
Profit Quality(3y)310.14%
Profit Quality(5y)305.57%
High Growth Momentum
Growth
EPS 1Y (TTM)-17.44%
EPS 3Y-19.54%
EPS 5Y-30.77%
EPS Q2Q%-22.22%
EPS Next Y33.59%
EPS Next 2Y80.06%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)25.62%
Revenue growth 3Y2.41%
Revenue growth 5Y-0.44%
Sales Q2Q%-0.17%
Revenue Next Year8.01%
Revenue Next 2Y17.76%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y9.32%
EBIT growth 3Y2.47%
EBIT growth 5Y0.63%
EBIT Next Year67.35%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-25.76%
FCF growth 3Y-8.46%
FCF growth 5Y-5.84%
OCF growth 1Y-15.4%
OCF growth 3Y-5.01%
OCF growth 5Y-6.45%