The GEO Group Inc

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GEO : NYSE : Financial
$39.21 up 0.63 | 1.63%
Today's Range: 38.6 - 39.36
Avg. Daily Volume: 1053000.0
01/18/17 - 4:02 PM ET

Financial Analysis


GEO GROUP INC's gross profit margin for the third quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Sales and net income have grown, and although the growth in revenues has outpaced the average competitor within the industry, the net income growth has not. GEO GROUP INC has strong liquidity. Currently, the Quick Ratio is 1.64 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 3.86% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)554.38469.87
EBITDA ($mil)101.2390.16
EBIT ($mil)72.4563.04
Net Income ($mil)43.7238.32


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)132.7855.52
Total Assets ($mil)3742.43434.62
Total Debt ($mil)2410.682085.19
Equity ($mil)966.41005.29


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin25.0226.37
EBITDA Margin18.2619.18
Operating Margin13.0713.42
Sales Turnover0.560.52
Return on Assets3.833.88
Return on Equity14.8313.27
Debt Q3 FY16 Q3 FY15
Current Ratio1.761.58
Debt/Capital0.710.67
Interest Expense33.4327.32
Interest Coverage2.172.31


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)74.9974.63
Div / share0.650.62
EPS0.590.52
Book value / share12.8913.47
Institutional Own % n/a n/a
Avg Daily Volume1073675.01990816.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 57.44 for the Equity Real Estate Investment Trusts REITs industry and a discount compared to the S&P 500 average of 25.49. To use another comparison, its price-to-book ratio of 2.96 indicates valuation on par with the S&P 500 average of 2.84 and a discount versus the industry average of 3.61. 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 19.79 Peers 57.44   GEO 147.89 Peers 20.23

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.

 

Premium. 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 significant premium 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 20.10 Peers 54.31   GEO 37.34 Peers 3.95

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.

 

Premium. 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 trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GEO 2.96 Peers 3.61   GEO 6.62 Peers 62.62

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 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 1.36 Peers 7.87   GEO 19.31 Peers 16.29

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.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

GEO has a sales growth rate that exceeds its peers.

 

 

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