Geo Group (NYSE:GEO) Trading Up 8.8% - Should You Buy?

Key Points

• Geo Group's stock surged 8.8% to $22.30, although trading volume significantly declined to about 493,086 shares, which is 83% lower than its average daily volume.
• The company reported a quarterly EPS of $0.22, exceeding analyst estimates, alongside a revenue of $636.17 million, marking a 4.8% increase year-over-year.
• Geo Group announced a $300 million share buyback program, which is indicative of the board's belief that the shares are undervalued.

Geo Group Inc (The) (NYSE:GEO - Get Free Report) rose 8.8% on Wednesday . The company traded as high as $22.08 and last traded at $22.30. Approximately 493,086 shares traded hands during mid-day trading, a decline of 83% from the average daily volume of 2,979,613 shares. The stock had previously closed at $20.49.

Analyst Upgrades and Downgrades

Several research analysts recently issued reports on the company. Jones Trading lowered their target price on Geo Group from $50.00 to $45.00 and set a "buy" rating for the company in a research report on Thursday, August 7th. Wedbush reaffirmed an "outperform" rating and issued a $36.00 price objective on shares of Geo Group in a research note on Monday, June 23rd. Four research analysts have rated the stock with a Buy rating, According to data from MarketBeat, the stock currently has a consensus rating of "Buy" and a consensus target price of $37.00.

Geo Group Stock Up 6.7%

The firm has a market cap of $3.09 billion, a price-to-earnings ratio of 33.63, a PEG ratio of 2.35 and a beta of 0.75. The firm has a 50 day moving average of $22.06 and a 200 day moving average of $25.38. The company has a quick ratio of 0.90, a current ratio of 0.90 and a debt-to-equity ratio of 1.07.

Geo Group (NYSE:GEO - Get Free Report) last posted its quarterly earnings results on Wednesday, August 6th. The real estate investment trust reported $0.22 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.16 by $0.06. The firm had revenue of $636.17 million for the quarter, compared to analysts' expectations of $621.55 million. Geo Group had a return on equity of 7.26% and a net margin of 3.69%.The company's revenue for the quarter was up 4.8% compared to the same quarter last year. During the same period in the prior year, the business earned $0.23 EPS. As a group, sell-side analysts predict that Geo Group Inc will post 0.83 earnings per share for the current year.

Geo Group declared that its board has initiated a share buyback program on Wednesday, August 6th that authorizes the company to buyback $300.00 million in outstanding shares. This buyback authorization authorizes the real estate investment trust to reacquire up to 8.2% of its shares through open market purchases. Shares buyback programs are often a sign that the company's board of directors believes its shares are undervalued.

Institutional Investors Weigh In On Geo Group

A number of hedge funds have recently added to or reduced their stakes in the company. Covestor Ltd increased its holdings in shares of Geo Group by 19.8% during the first quarter. Covestor Ltd now owns 2,653 shares of the real estate investment trust's stock valued at $77,000 after acquiring an additional 438 shares in the last quarter. Envestnet Asset Management Inc. increased its stake in Geo Group by 2.5% during the 2nd quarter. Envestnet Asset Management Inc. now owns 18,056 shares of the real estate investment trust's stock valued at $432,000 after purchasing an additional 441 shares in the last quarter. RoundAngle Advisors LLC raised its holdings in Geo Group by 1.5% during the second quarter. RoundAngle Advisors LLC now owns 35,120 shares of the real estate investment trust's stock worth $841,000 after buying an additional 509 shares during the last quarter. Hsbc Holdings PLC lifted its stake in shares of Geo Group by 2.8% in the first quarter. Hsbc Holdings PLC now owns 19,208 shares of the real estate investment trust's stock valued at $560,000 after buying an additional 520 shares in the last quarter. Finally, GAMMA Investing LLC grew its holdings in shares of Geo Group by 6.9% during the first quarter. GAMMA Investing LLC now owns 8,721 shares of the real estate investment trust's stock valued at $255,000 after buying an additional 566 shares during the last quarter. Institutional investors and hedge funds own 76.10% of the company's stock.

About Geo Group

The GEO Group, Inc NYSE: GEO engages in ownership, leasing, and management of secure facilities, processing centers, and community-based reentry facilities in the United States, Australia, the United Kingdom, and South Africa. The company also provides secure facility management services, including the provision of security, administrative, rehabilitation, education, and food services; reentry services, such as temporary housing, programming, employment assistance, and other services; electronic monitoring and supervision services; and transportation services; as well as designs, constructs, and finances new facilities through projects.

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