Hodges Capital Management Reduces GEO Group Holdings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy GEO?
Source: Fool
- Share Reduction Transaction: Hodges Capital Management disclosed a sale of 401,146 shares of The GEO Group in Q4 2025, with an estimated transaction value of $6.69 million, indicating a cautious outlook on the company's future performance.
- Quarterly Financial Performance: The GEO Group reported $707.7 million in revenue for Q4, with diluted EPS rising to $0.23 from $0.11 a year ago, showcasing the company's potential for revenue recovery amidst challenges.
- Stock Price Volatility Context: As of February 10, GEO shares were priced at $16.11, down over 40% in the past year, contrasting sharply with the S&P 500's 14% gain, reflecting market concerns about its future.
- Long-term Investment Risks: With net debt around $1.5 billion, management targets a net leverage ratio of 2.8x to 3.0x in 2026, highlighting the financial risks the company faces amid policy changes and market volatility.
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Analyst Views on GEO
Wall Street analysts forecast GEO stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 13.470
Low
30.00
Averages
32.50
High
35.00
Current: 13.470
Low
30.00
Averages
32.50
High
35.00
About GEO
The GEO Group, Inc. is a diversified government service provider. The Company specializes in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. The Company’s U.S. Secure Services segment primarily encompasses the United Sates-based secure services business. Its Electronic Monitoring and Supervision Services segment represents technology and services provided to adults for monitoring services for community-based parolees, probationers, and pretrial defendants. Its Reentry Services segment represents evidence-based supervision and treatment programs provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs. Its International Services segment primarily consists of secure services operations in South Africa and Australia.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
GEO Group Reports Record Contracts and 2026 Guidance
- Record Contract Wins: GEO Group secured approximately $520 million in new contracts in 2025, expected to normalize by year-end, marking the largest annual business acquisition in the company's history and significantly enhancing its competitive position in the market.
- Monitoring Device Revenue Growth: Despite a decline in SmartLink app usage, there is a steady increase in demand for higher-priced monitoring devices like ankle monitors, which is anticipated to boost revenues and earnings under the ISAP contract even if overall participation remains constant.
- Strong Financial Performance: For Q4 2025, GEO reported net income of approximately $32 million, or $0.23 per diluted share, on quarterly revenues of about $708 million, demonstrating robust growth driven by new ICE contracts.
- Optimistic Future Outlook: Management expects 2026 GAAP net income to range from $0.99 to $1.07 per diluted share, with annual revenues projected between $2.9 billion and $3.1 billion, reflecting confidence in future growth despite challenges from start-up costs and government-related uncertainties.
See More
Hodges Capital Management Reduces GEO Group Holdings
- Share Reduction Transaction: Hodges Capital Management disclosed a sale of 401,146 shares of The GEO Group in Q4 2025, with an estimated transaction value of $6.69 million, indicating a cautious outlook on the company's future performance.
- Quarterly Financial Performance: The GEO Group reported $707.7 million in revenue for Q4, with diluted EPS rising to $0.23 from $0.11 a year ago, showcasing the company's potential for revenue recovery amidst challenges.
- Stock Price Volatility Context: As of February 10, GEO shares were priced at $16.11, down over 40% in the past year, contrasting sharply with the S&P 500's 14% gain, reflecting market concerns about its future.
- Long-term Investment Risks: With net debt around $1.5 billion, management targets a net leverage ratio of 2.8x to 3.0x in 2026, highlighting the financial risks the company faces amid policy changes and market volatility.
See More
Crocs Shares Surge 21% on Strong Earnings Guidance
- Crocs Strong Guidance: Crocs shares surged 21% after the company projected adjusted earnings between $2.67 and $2.77 per share for the current quarter, exceeding the market expectation of $2.52, indicating resilience and growth potential in the current economic climate.
- Restaurant Brands Challenges: Despite reporting revenue and profit beats, Restaurant Brands' shares fell 6%, primarily due to rising costs, including beef, which pressured profits, reflecting the dual challenges of intensified industry competition and cost pressures.
- Cognex Stock Surge: Cognex shares jumped over 37% after reporting adjusted earnings and revenue beats for the fourth quarter, along with optimistic guidance for the current quarter, showcasing significant advancements in AI-enabled industrial machine vision technology.
- Equinix Exceeds Guidance: Equinix shares rose 12% after projecting adjusted EBITDA of $5.141 billion to $5.221 billion by 2026, surpassing analyst expectations, demonstrating strong growth potential in the digital infrastructure sector.
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Shares of Immigration Enforcement Firms Under Pressure Amid Policy Criticism
- Increased Stock Volatility: Shares of companies involved in U.S. immigration enforcement, such as Geo Group and CoreCivic, have experienced significant volatility in recent weeks due to intensified criticism of White House deportation policies, raising investor concerns about future revenue stability.
- Uncertain Government Funding: Congressional Democrats have threatened to block a Department of Homeland Security funding measure unless immigration enforcement policies are revised, creating a standoff that could lead to a partial government shutdown, injecting uncertainty into revenue streams that were previously considered stable.
- High Dependence on ICE Revenue: Geo Group has indicated that nearly half of its 2025 revenue is derived from Immigration and Customs Enforcement (ICE), while CoreCivic reported $244.7 million in fourth-quarter revenue from ICE, accounting for 40.5% of its total revenue, highlighting the companies' heavy reliance on government policies.
- Potential Long-Term Improvement: Despite short-term pressures, analysts suggest that substantial funds from last summer's tax and spending legislation could support contractors, and policy changes may create new demand, particularly benefiting Axon Enterprise, which could see increased business from the DHS's requirement for agents to wear body cameras.
See More
GEO Group CEO Announces Retirement, Founder Returns
- Executive Transition: GEO Group's CEO J. David Donahue has announced his retirement effective February 28, 2026, indicating a significant leadership change that could impact investor confidence and the company's strategic direction.
- Founder Returns: Founder and Executive Chairman George Zoley will return as CEO on March 1, 2026, through April 2, 2029, a decision that may bring stability to governance but could also prompt a reevaluation of his leadership style.
- Stock Price Reaction: Following this announcement, GEO Group's shares fell 3.5% in premarket trading to $15.28, reflecting market unease regarding the executive transition, which may affect investor sentiment in the short term.
- Financial Performance: GEO Group reported a GAAP EPS of $0.23 and revenue of $707.7 million, exceeding market expectations by $40.47 million, demonstrating the company's financial robustness, although leadership changes may impact future performance.
See More
GEO Group CEO Announces Retirement, Founder Returns to Leadership Role
- Executive Transition: GEO Group's CEO J. David Donahue has announced his retirement effective February 28, 2026, marking a significant leadership change that could impact investor confidence and the company's strategic direction.
- Founder’s Return: Founder and Executive Chairman George C. Zoley will resume the role of CEO from March 1, 2026, through April 2, 2029, expected to leverage his extensive experience to drive growth in correctional management and community reentry services.
- Business Development Potential: Since founding GEO in 1984, Zoley has been instrumental in developing new business opportunities, particularly in electronic monitoring and rehabilitation services, which are anticipated to expand the company's market share and service offerings.
- Company Scale and Impact: GEO operates 95 facilities with approximately 75,000 beds and a workforce nearing 20,000, and Zoley's return may enhance operational efficiency and market competitiveness, especially in key markets like the U.S., Australia, and South Africa.
See More
GEO Group Reports Record Contracts and 2026 Guidance
- Record Contract Wins: GEO Group secured approximately $520 million in new contracts in 2025, expected to normalize by year-end, marking the largest annual business acquisition in the company's history and significantly enhancing its competitive position in the market.
- Monitoring Device Revenue Growth: Despite a decline in SmartLink app usage, there is a steady increase in demand for higher-priced monitoring devices like ankle monitors, which is anticipated to boost revenues and earnings under the ISAP contract even if overall participation remains constant.
- Strong Financial Performance: For Q4 2025, GEO reported net income of approximately $32 million, or $0.23 per diluted share, on quarterly revenues of about $708 million, demonstrating robust growth driven by new ICE contracts.
- Optimistic Future Outlook: Management expects 2026 GAAP net income to range from $0.99 to $1.07 per diluted share, with annual revenues projected between $2.9 billion and $3.1 billion, reflecting confidence in future growth despite challenges from start-up costs and government-related uncertainties.
See More
Hodges Capital Management Reduces GEO Group Holdings
- Share Reduction Transaction: Hodges Capital Management disclosed a sale of 401,146 shares of The GEO Group in Q4 2025, with an estimated transaction value of $6.69 million, indicating a cautious outlook on the company's future performance.
- Quarterly Financial Performance: The GEO Group reported $707.7 million in revenue for Q4, with diluted EPS rising to $0.23 from $0.11 a year ago, showcasing the company's potential for revenue recovery amidst challenges.
- Stock Price Volatility Context: As of February 10, GEO shares were priced at $16.11, down over 40% in the past year, contrasting sharply with the S&P 500's 14% gain, reflecting market concerns about its future.
- Long-term Investment Risks: With net debt around $1.5 billion, management targets a net leverage ratio of 2.8x to 3.0x in 2026, highlighting the financial risks the company faces amid policy changes and market volatility.
See More
Crocs Shares Surge 21% on Strong Earnings Guidance
- Crocs Strong Guidance: Crocs shares surged 21% after the company projected adjusted earnings between $2.67 and $2.77 per share for the current quarter, exceeding the market expectation of $2.52, indicating resilience and growth potential in the current economic climate.
- Restaurant Brands Challenges: Despite reporting revenue and profit beats, Restaurant Brands' shares fell 6%, primarily due to rising costs, including beef, which pressured profits, reflecting the dual challenges of intensified industry competition and cost pressures.
- Cognex Stock Surge: Cognex shares jumped over 37% after reporting adjusted earnings and revenue beats for the fourth quarter, along with optimistic guidance for the current quarter, showcasing significant advancements in AI-enabled industrial machine vision technology.
- Equinix Exceeds Guidance: Equinix shares rose 12% after projecting adjusted EBITDA of $5.141 billion to $5.221 billion by 2026, surpassing analyst expectations, demonstrating strong growth potential in the digital infrastructure sector.
See More
Shares of Immigration Enforcement Firms Under Pressure Amid Policy Criticism
- Increased Stock Volatility: Shares of companies involved in U.S. immigration enforcement, such as Geo Group and CoreCivic, have experienced significant volatility in recent weeks due to intensified criticism of White House deportation policies, raising investor concerns about future revenue stability.
- Uncertain Government Funding: Congressional Democrats have threatened to block a Department of Homeland Security funding measure unless immigration enforcement policies are revised, creating a standoff that could lead to a partial government shutdown, injecting uncertainty into revenue streams that were previously considered stable.
- High Dependence on ICE Revenue: Geo Group has indicated that nearly half of its 2025 revenue is derived from Immigration and Customs Enforcement (ICE), while CoreCivic reported $244.7 million in fourth-quarter revenue from ICE, accounting for 40.5% of its total revenue, highlighting the companies' heavy reliance on government policies.
- Potential Long-Term Improvement: Despite short-term pressures, analysts suggest that substantial funds from last summer's tax and spending legislation could support contractors, and policy changes may create new demand, particularly benefiting Axon Enterprise, which could see increased business from the DHS's requirement for agents to wear body cameras.
See More
GEO Group CEO Announces Retirement, Founder Returns
- Executive Transition: GEO Group's CEO J. David Donahue has announced his retirement effective February 28, 2026, indicating a significant leadership change that could impact investor confidence and the company's strategic direction.
- Founder Returns: Founder and Executive Chairman George Zoley will return as CEO on March 1, 2026, through April 2, 2029, a decision that may bring stability to governance but could also prompt a reevaluation of his leadership style.
- Stock Price Reaction: Following this announcement, GEO Group's shares fell 3.5% in premarket trading to $15.28, reflecting market unease regarding the executive transition, which may affect investor sentiment in the short term.
- Financial Performance: GEO Group reported a GAAP EPS of $0.23 and revenue of $707.7 million, exceeding market expectations by $40.47 million, demonstrating the company's financial robustness, although leadership changes may impact future performance.
See More
GEO Group CEO Announces Retirement, Founder Returns to Leadership Role
- Executive Transition: GEO Group's CEO J. David Donahue has announced his retirement effective February 28, 2026, marking a significant leadership change that could impact investor confidence and the company's strategic direction.
- Founder’s Return: Founder and Executive Chairman George C. Zoley will resume the role of CEO from March 1, 2026, through April 2, 2029, expected to leverage his extensive experience to drive growth in correctional management and community reentry services.
- Business Development Potential: Since founding GEO in 1984, Zoley has been instrumental in developing new business opportunities, particularly in electronic monitoring and rehabilitation services, which are anticipated to expand the company's market share and service offerings.
- Company Scale and Impact: GEO operates 95 facilities with approximately 75,000 beds and a workforce nearing 20,000, and Zoley's return may enhance operational efficiency and market competitiveness, especially in key markets like the U.S., Australia, and South Africa.
See More
