GEO GROUP INC/THE (GEO) Stock Fundamental Analysis
NYSE:GEO - New York Stock Exchange, Inc. - US36162J1060 - Common Stock - Currency: USD
Taking everything into account, GEO scores 4 out of 10 in our fundamental rating. 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
GEO had positive earnings in the past year.
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
The Return On Assets of GEO (1.36%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 3.68%, GEO is in line with its industry, outperforming 54.22% of the companies in the same industry.
With a decent Return On Invested Capital value of 8.58%, GEO is doing good in the industry, outperforming 67.47% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for GEO is below the industry average of 11.67%.
The 3 year average ROIC (7.94%) for GEO is below the current ROIC(8.58%), indicating increased profibility in the last year.
| 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
GEO has a Profit Margin of 1.63%. This is comparable to the rest of the industry: GEO outperforms 53.01% of its industry peers.
GEO's Profit Margin has declined in the last couple of years.
The Operating Margin of GEO (12.25%) is better than 77.11% of its industry peers.
GEO's Operating Margin has been stable in the last couple of years.
GEO has a Gross Margin of 26.42%. This is in the lower half of the industry: GEO underperforms 60.24% of its industry peers.
GEO's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so GEO is destroying value.
GEO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, GEO has more shares outstanding
GEO has a better debt/assets ratio than last year.
2.2 Solvency
GEO has an Altman-Z score of 2.17. This is not the best score and indicates that GEO is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.17, GEO is in line with its industry, outperforming 44.58% of the companies in the same industry.
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 49.40% of its industry peers.
GEO has a Debt/Equity ratio of 1.23. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.23, GEO is doing worse than 72.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | 12.66 | ||
| Altman-Z | 2.17 |
ROIC/WACC0.94
WACC9.16%
2.3 Liquidity
GEO has a Current Ratio of 1.29. This is a normal value and indicates that GEO is financially healthy and should not expect problems in meeting its short term obligations.
GEO has a worse Current ratio (1.29) than 67.47% 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
GEO shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -17.44%.
Measured over the past years, GEO shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -30.77% on average per year.
The Revenue has grown by 25.62% in the past year. This is a very strong growth!
The Revenue has been decreasing by -0.44% on average over the past years.
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 76.47% 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 17.33% yearly.
EPS Next Y26.59%
EPS Next 2Y76.47%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year7.64%
Revenue Next 2Y17.33%
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
The Price/Earnings ratio is 35.66, which means the current valuation is very expensive for GEO.
The rest of the industry has a similar Price/Earnings ratio as GEO.
When comparing the Price/Earnings ratio of GEO to the average of the S&P500 Index (27.45), we can say GEO is valued slightly more expensively.
With a Price/Forward Earnings ratio of 10.84, the valuation of GEO can be described as very reasonable.
Based on the Price/Forward Earnings ratio, GEO is valued cheaply inside the industry as 86.75% of the companies are valued more expensively.
GEO's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.66 | ||
| Fwd PE | 10.84 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GEO is valued a bit cheaper than the industry average as 67.47% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, GEO is valued a bit cheaper than 63.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.92 | ||
| EV/EBITDA | 10.44 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as GEO's earnings are expected to grow with 76.47% in the coming years.
PEG (NY)1.34
PEG (5Y)N/A
EPS Next 2Y76.47%
EPS Next 3YN/A
5. Dividend
5.1 Amount
No dividends for GEO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
25.32
+0.69 (+2.8%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryCommercial Services & Supplies
Earnings (Last)
Earnings (Next)
Inst Owners91.27%
Inst Owner Change5.91%
Ins Owners1.72%
Ins Owner Change8.91%
Market Cap3.58B
Analysts82.5
Price Target42.64 (68.4%)
Short Float %6.88%
Short Ratio3.06
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)-6.7%
PT rev (3m)-5.43%
EPS NQ rev (1m)-4.6%
EPS NQ rev (3m)-29.3%
EPS NY rev (1m)-5.24%
EPS NY rev (3m)-20.49%
Revenue NQ rev (1m)0.23%
Revenue NQ rev (3m)-2.2%
Revenue NY rev (1m)-0.34%
Revenue NY rev (3m)-2.08%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.66 | ||
| Fwd PE | 10.84 | ||
| P/S | 1.18 | ||
| P/FCF | 26.92 | ||
| P/OCF | 15.72 | ||
| P/B | 2.66 | ||
| P/tB | 7.73 | ||
| EV/EBITDA | 10.44 |
EPS(TTM)0.71
EY2.8%
EPS(NY)2.34
Fwd EY9.22%
FCF(TTM)0.94
FCFY3.72%
OCF(TTM)1.61
OCFY6.36%
SpS21.43
BVpS9.5
TBVpS3.27
PEG (NY)1.34
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 | 2.17 |
F-Score6
WACC9.16%
ROIC/WACC0.94
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 Y26.59%
EPS Next 2Y76.47%
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 Year7.64%
Revenue Next 2Y17.33%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y9.32%
EBIT growth 3Y2.47%
EBIT growth 5Y0.63%
EBIT Next Year53.72%
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%