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Wednesday, October 4, 2023

Will The GEO Group Inc. (GEO) Find a Support Level Soon?

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The GEO Group Inc. (GEO) shares are trading at lower $9.71 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $16.50.

To add more color to this target, the company’s high over the last year is $18.42 and the low is $8.00. Over the last 52 weeks, GEO is down -28.02% while the S&P 500 is up 17.22%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, GEO reported a profit of $144.73 million. The GEO Group Inc. also saw revenues increase to $579.14 million. In addition, GEO has free cash flow of $274.31 million as of 09-2020. The company’s EBITDA came in at $99.86 million which compares well with its peers.

GEO booked profit margins of 5.80%, its Return on Equity (ROE) is 14.50%, and its Return on Assets is 3.30%. All told, it is clear that, GEO needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. GEO has a short ratio of 5.92 and outstanding shares of 119.83M.

Company Outlook

GEO has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.13 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.16. The GEO Group Inc. GEO also noted assets of $4.25 billion at the end of the last quarter. Investors should also keep an eye on sector updates as GEO has historically followed its peers on positive news.

All told, The GEO Group Inc. GEO has strung together solid data and demonstrated underlying fundamentals. At its current valuation, GEO represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

The GEO Group Inc. GEO is now commanding a market cap of 1.13B and a float of 117.22M. GEO is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of GEO stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in GEO, either long or short, and we have not been compensated for this article.

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