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Geo Group (GEO) Dips More Than Broader Markets: What You Should Know

·3 min read

Geo Group (GEO) closed the most recent trading day at $8.11, moving -1.22% from the previous trading session. This move lagged the S&P 500's daily loss of 1.13%. Meanwhile, the Dow lost 0.56%, and the Nasdaq, a tech-heavy index, added 0.16%.

Coming into today, shares of the private prison operator had lost 1.32% in the past month. In that same time, the Finance sector lost 6.7%, while the S&P 500 lost 7.59%.

Wall Street will be looking for positivity from Geo Group as it approaches its next earnings report date. On that day, Geo Group is projected to report earnings of $0.56 per share, which would represent a year-over-year decline of 13.85%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $605.85 million, up 8.72% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.44 per share and revenue of $2.35 billion. These totals would mark changes of -1.61% and +4.1%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Geo Group. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Geo Group currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that Geo Group has a Forward P/E ratio of 3.37 right now. This valuation marks a discount compared to its industry's average Forward P/E of 12.69.

Investors should also note that GEO has a PEG ratio of 0.34 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The REIT and Equity Trust - Other was holding an average PEG ratio of 2.15 at yesterday's closing price.

The REIT and Equity Trust - Other industry is part of the Finance sector. This group has a Zacks Industry Rank of 74, putting it in the top 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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