Earnings Beat: The GEO Group, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

The GEO Group, Inc. (NYSE:GEO) just released its second-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.5% to hit US$636m. GEO Group also reported a statutory profit of US$0.21, which was an impressive 30% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the most recent consensus for GEO Group from five analysts is for revenues of US$2.62b in 2025. If met, it would imply a reasonable 6.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 45% to US$0.93. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$2.60b and earnings per share (EPS) of US$0.94 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for GEO Group

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$40.00. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on GEO Group, with the most bullish analyst valuing it at US$50.00 and the most bearish at US$35.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that GEO Group's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 1.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that GEO Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple GEO Group analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for GEO Group that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.