The GEO Group Inc

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GEO : NYSE : Financial
$23.38 -0.08 | -0.32%
Today's Range: 23.11 - 23.67
Avg. Daily Volume: 1,988,700
09/29/16 - 1:27 PM ET

Financial Analysis


GEO GROUP INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. GEO GROUP INC has average liquidity. Currently, the Quick Ratio is 1.41 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 4.80% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)548.35445.95
EBITDA ($mil)94.6180.64
EBIT ($mil)65.9654.07
Net Income ($mil)23.2128.29


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)111.3254.99
Total Assets ($mil)3600.453401.45
Total Debt ($mil)2268.942043.72
Equity ($mil)967.471016.34


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin23.9825.12
EBITDA Margin17.2518.08
Operating Margin12.0312.13
Sales Turnover0.560.52
Return on Assets3.833.94
Return on Equity14.2513.19
Debt Q2 FY16 Q2 FY15
Current Ratio1.521.5
Debt/Capital0.70.67
Interest Expense31.0926.65
Interest Coverage2.122.03


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)74.9774.66
Div / share0.650.62
EPS0.310.38
Book value / share12.913.61
Institutional Own % n/a n/a
Avg Daily Volume1895008.0453730.0

Valuation


HOLD. GEO GROUP INC's P/E ratio indicates a significant discount compared to an average of 61.50 for the Equity Real Estate Investment Trusts REITs industry and a significant discount compared to the S&P 500 average of 25.19. To use another comparison, its price-to-book ratio of 1.95 indicates a discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 3.97. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, GEO GROUP INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
GEO 13.56 Peers 61.50   GEO 18.74 Peers 22.10

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

GEO is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

GEO is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
GEO 13.20 Peers 62.88   GEO NM Peers 3.89

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

GEO is trading at a significant discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

GEO's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GEO 1.95 Peers 3.97   GEO 1.63 Peers 60.36

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

GEO is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, GEO is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
GEO 0.93 Peers 8.67   GEO 15.32 Peers 15.95

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

GEO is trading at a significant discount to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

GEO is keeping pace with its peers on the basis of sales growth.

 

 

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