A History of Outperforming Analyst Forecasts and Beating the Odds: The GEO Group Inc. (GEO)

The GEO Group Inc. (NYSE: GEO) stock fell -5.19% on Thursday to $7.67 against a previous-day closing price of $8.09. With 1.74 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.15 million shares. During the session, the Security & Protection Services company that operates in wider Industrials sector, reached to the highest price of $8.05 whereas the lowest price it dropped to was $7.60. The 52-week range on GEO shows that it touched its highest point at $12.44 and its lowest point at $5.97 during that stretch. It currently has a 1-year price target of $13.67. Beta for the stock currently stands at 0.68.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of GEO was down-trending over the past week, with a drop of -8.03%, but this was up by 5.36% over a month. Three-month performance dropped to -16.54% while six-month performance fell -24.43%. The stock gained 9.73% in the past year, while it has lost -29.95% so far this year. A look at the trailing 12-month EPS for GEO yields 1.09 with Next year EPS estimates of 1.24. For the next quarter, that number is 0.20. This implies an EPS growth rate of 99.70% for this year and 33.23% for next year. EPS is expected to grow by 15.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -2.00%.

Float and Shares Shorts:

At present, 121.43 million GEO shares are outstanding with a float of 118.21 million shares on hand for trading. On Apr 27, 2023, short shares totaled 22.65 million, which was 17.98% higher than short shares on Mar 30, 2023. In addition to Dr. George C. Zoley Ph.D. as the firm’s Founder & Exec. Chairman, Mr. Jose Gordo J.D. serves as its CEO & Director.

Institutional Ownership:

Through their ownership of 82.48% of GEO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.37% of GEO, in contrast to 42.70% held by mutual funds. Shares owned by individuals account for 36.12%. As the largest shareholder in GEO with 15.26% of the stake, BlackRock Fund Advisors holds 18,934,488 shares worth 18,934,488. A second-largest stockholder of GEO, The Vanguard Group, Inc., holds 13,455,221 shares, controlling over 10.84% of the firm’s shares. Mason Capital Management LLC is the third largest shareholder in GEO, holding 5,403,165 shares or 4.35% stake. With a 7.26% stake in GEO, the iShares Core S&P Small Cap ETF is the largest stakeholder. A total of 9,010,545 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 2.95% of GEO stock, is the second-largest Mutual Fund holder. It holds 3,655,153 shares valued at 27.52 million. Vanguard Small Cap Index Fund holds 2.48% of the stake in GEO, owning 3,076,795 shares worth 23.17 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, GEO reported revenue of $588.18M and operating income of $95.07M. The EBITDA in the recently reported quarter was $132.65M and diluted EPS was $0.37.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for GEO since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With GEO analysts setting a high price target of $15.00 and a low target of $11.00, the average target price over the next 12 months is $13.67. Based on these targets, GEO could surge 95.57% to reach the target high and rise by 43.42% to reach the target low. Reaching the average price target will result in a growth of 78.23% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded GEO stock several times over the past three months with 23 Buys and 15 Sells. In these transactions, 865,723 shares were bought while 364,943 shares were sold. The number of buy transactions has increased to 24 while that of sell transactions has risen to 17 over the past year. The total number of shares bought during that period was 915,723 while 370,443 shares were sold.

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