Saturday, April 10, 2021

Noble Capital Markets slashes price target on The GEO Group Inc. [GEO] – find out why.

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The GEO Group Inc. [NYSE: GEO] traded at a low on 04/07/21, posting a -20.38 loss after which it closed the day’ session at $6.21. The company report on April 7, 2021 that The GEO Group Suspends Quarterly Dividend to Maximize Repayment of Debt While It Evaluates Corporate Structure.

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The GEO Group, Inc. (NYSE: GEO) (“GEO”) announced that its Board of Directors (the “Board”) has immediately suspended GEO’s quarterly dividend payments with the goal of maximizing the use of cash flows to repay debt, deleverage, and internally fund growth. GEO currently intends to maintain its corporate tax structure as a Real Estate Investment Trust (“REIT”), but the Board has determined to undertake an evaluation of GEO’s structure as a REIT.


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The Board’s evaluation of the current corporate tax structure and GEO’s REIT status is expected to take into consideration, among other factors, potential changes to GEO’s financial operating performance, as well as, potential changes to the Internal Revenue Code of 1986, as amended (the “Code”) applicable to U.S. corporations and REITs. The Board expects to conclude its evaluation in the fourth quarter of 2021, and should the Board determine not to change its current intent to maintain GEO’s REIT status, an additional dividend payment may be required before year-end in order to meet the minimum REIT distribution requirements under the Code.

The results of the trading session contributed to over 23243848 shares changing hands. Over the past one week, the price volatility of The GEO Group Inc. stands at 3.59% while the volatility over the past one month is 3.47%.

The market cap for GEO stock reached $762.22 million, with 119.84 million shares outstanding and 117.22 million shares in the current float. Compared to the average trading volume of 4.79M shares, GEO reached a trading volume of 23243848 in the most recent trading day, which is why market watchdogs consider the stock to be active.

What do top market gurus say about The GEO Group Inc. [GEO]?

Noble Capital Markets have made an estimate for The GEO Group Inc. shares, keeping their opinion on the stock as Outperform, with their previous recommendation back on June 29, 2020. The new note on the price target was released on February 15, 2019, representing the official price target for The GEO Group Inc. stock. Previously, the target price had yet another raise to $35, while JP Morgan analysts kept a Overweight rating on GEO stock. On March 08, 2017, analysts decreased their price target for GEO shares from 52 to 50.

The Average True Range (ATR) for The GEO Group Inc. is set at 0.36, with the Price to Sales ratio for GEO stock in the period of the last 12 months amounting to 0.32. The Price to Book ratio for the last quarter was 0.81, with the Price to Cash per share for the same quarter was set at 2.31. Price to Free Cash Flow for GEO in the course of the last twelve months was 6.53 with Quick ratio for the last quarter at 1.70.

How has GEO stock performed recently?

The GEO Group Inc. [GEO] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -20.69. With this latest performance, GEO shares dropped by -22.57% in over the last four-week period, additionally sinking by -45.09% over the last 6 months – not to mention a drop of -47.95% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for GEO stock in for the last two-week period is set at 23.74, with the RSI for the last a single of trading hit 16.35, and the three-weeks RSI is set at 29.25 for The GEO Group Inc. [GEO]. The present Moving Average for the last 50 days of trading for this stock 8.00, while it was recorded at 7.44 for the last single week of trading, and 9.70 for the last 200 days.

The GEO Group Inc. [GEO]: Deeper insight into the fundamentals

Operating Margin for any stock indicates how profitable investing would be, and The GEO Group Inc. [GEO] shares currently have an operating margin of +10.98 and a Gross Margin at +19.21. The GEO Group Inc.’s Net Margin is presently recorded at +4.81.

Return on Total Capital for GEO is now 6.60, given the latest momentum, and Return on Invested Capital for the company is 2.93. Return on Equity for this stock inclined to 11.84, with Return on Assets sitting at 2.58. When it comes to the capital structure of this company, The GEO Group Inc. [GEO] has a Total Debt to Total Equity ratio set at 333.56. Additionally, GEO Total Debt to Total Capital is recorded at 76.94, with Total Debt to Total Assets ending up at 68.29. Long-Term Debt to Equity for the company is recorded at 327.51, with the Long-Term Debt to Total Capital now at 75.54.

Reflecting on the efficiency of the workforce at the company, The GEO Group Inc. [GEO] managed to generate an average of $5,652 per employee. Receivables Turnover for the company is 3.00 with a Total Asset Turnover recorded at a value of 0.54.The GEO Group Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.70 and a Current Ratio set at 1.70.

Earnings analysis for The GEO Group Inc. [GEO]

With the latest financial reports released by the company, The GEO Group Inc. posted 0.34/share EPS, while the average EPS was predicted by analysts to be reported at 0.3/share. When compared, the two values demonstrate that the company surpassed the estimates by a Surprise Factor of 13.30%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for GEO. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for The GEO Group Inc. go to 15.00%.

Insider trade positions for The GEO Group Inc. [GEO]

There are presently around $550 million, or 74.40% of GEO stock, in the hands of institutional investors. The top three institutional holders of GEO stocks are: VANGUARD GROUP INC with ownership of 20,274,759, which is approximately 7.572% of the company’s market cap and around 3.70% of the total institutional ownership; BLACKROCK INC., holding 17,846,900 shares of the stock with an approximate value of $110.83 million in GEO stocks shares; and PRUDENTIAL FINANCIAL INC, currently with $27.67 million in GEO stock with ownership of nearly 19.988% of the company’s market capitalization.

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Positions in The GEO Group Inc. stocks held by institutional investors increased at the end of May and at the time of the May reporting period, where 129 institutional holders increased their position in The GEO Group Inc. [NYSE:GEO] by around 16,764,652 shares. Additionally, 105 investors decreased positions by around 6,645,600 shares, while 31 investors held positions by with 65,134,140 shares. The mentioned changes placed institutional holdings at 88,544,392 shares, according to the latest SEC report filing. GEO stock had 47 new institutional investments in for a total of 2,117,979 shares, while 43 institutional investors sold positions of 2,831,703 shares during the same period.

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