GEO Group (GEO) Stock Forecast & Price Target

GEO Group Inc has demonstrated a significant increase in operational capacity, with detentions rising approximately 5,000 inmates sequentially to 56,400, which indicates enhanced utilization of its facilities. The company has also revised its Managed-Only revenue projections for FY25 and FY26 upwards, anticipating revenues of $630 million and $659 million, respectively, primarily driven by the USMS contract. Additionally, a projected 60% growth in non-residential units could lead to a substantial increase in FY26 AEBITDA by approximately $80 million, or 14%, reflecting strong potential for financial performance and operational expansion.

The GEO Group has revised its FY25 adjusted EPS estimate downward to $0.82 from $0.84 and decreased its revenue estimate to $2.50 billion, reflecting the impact of the Lawton facility disposition. Furthermore, while the anticipated debt repayments could potentially reduce GEO's net debt/AEBITDA ratio to below 3x, there are significant external risks that could hinder the company's financial stability, including increased scrutiny from bank regulators and political pressures affecting federal contracts. These factors collectively contribute to a negative outlook for the stock, emphasizing a constricted funding environment and potential complications in securing future equity capital.