GEO · GEO Group
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $25.75
Note written ·
Price against the kill line
26.3% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $25.75, on record since 10 November 2026. The shares are up 4.4% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $25.75, which would return the shares to their level before the 5 November 2026 report and erase the November rally. A disclosed Big Horn or Rivers activation delay past 31 December 2026, or a cancelled ICE contract, would also break the case.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 761
- Revenue, change on a year (%)
- +11.5
- Operating margin (%)
- 13.5
- Free cash flow, four quarters ($M)
- 217
- Net cash, cash less debt ($M)
- −1,315
- Price to earnings (×)
- 25.8
- Enterprise value to sales (×)
- 1.9
- Enterprise value to operating income (×)
- 14.9
All filed numbers
What GEO Group reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 761 | +11.5 | 13.5 |
| first filed | 732 | +15.1 | 13.9 |
| first filed | 705 | +16.6 | 12.7 |
| first filed | 708 | +16.5 | 11.8 |
| first filed | 682 | +13.1 | 6.0 |
| first filed | 636 | +4.8 | 11.3 |
| Pre-tax income ($M) | 66.3 |
| Net income ($M) four quarters: 167 | 49.2 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −5.7 |
| Operating cash flow ($M) | 328 |
| Capital spending ($M) | 111 |
| Free cash flow ($M) | 217 |
| Cash and short-term investments ($M) | 216 |
| Debt ($M) non-current long-term debt plus current maturities | 1,531 |
| Net cash, cash less debt ($M) | −1,315 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 544 |
| Inventory ($M) at 31 December 2025, filed 25 February 2026 | 41.0 |
| Shareholders' equity ($M) | 1,572 |
| Market value ($M) | 4,306 |
| Enterprise value, market value plus net debt ($M) | 5,621 |
| Enterprise value to sales (×) | 1.9 |
| Enterprise value to operating income (×) | 14.9 |
| Price to earnings (×) | 25.8 |
| Price to book value (×) | 2.7 |
| Free-cash-flow yield (%) | 5.0 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 7.5% of shares outstanding sold short, 3.6 days of average trading to cover, +2.5% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $912K |
| 12 monthsfrom | $0 | $1.1M |
The thesis
The GEO Group is modestly more likely to beat the S&P 500 over the next three months. Its third-quarter report on 5 November 2026 showed revenue up 12% and higher profit guidance, and two new 10-year Immigration and Customs Enforcement (ICE) contracts have begun. Federal detention funding when the stopgap spending bill expires on 11 December 2026 settles the case.
Third-quarter revenue was $761.1 million, up from $682.3 million a year earlier. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) rose 21% to $145.3 million, according to the company release. The 10-Q filed 6 November 2026 shows the same revenue figure.
The shares closed at $32.22 on 12 November 2026. They closed at $25.17 on 5 November 2026, the day of the report, and at $32.72 on 11 November 2026. The 52-week intraday high is $33.31, set on 11 November 2026. The market has already priced in the report and the contract wins, so the remaining test is policy: whether Congress funds detention at the current level after the 3 November 2026 midterm elections.
Bullish and bearish views on The GEO Group, Inc.
The bull case on The GEO Group, Inc. (GEO), in brief: third-quarter earnings landed at the top of guidance. The bear case: federal funding is the central risk.
Bull case
- Third-quarter earnings landed at the top of guidance. GAAP (generally accepted accounting principles) earnings per share were $0.37, against guidance of $0.35–$0.37 given on 6 August 2026. Adjusted earnings per share were $0.39 (GEO release, 5 November 2026).
- Full-year profit guidance moved up. Adjusted EBITDA guidance is $568–$573 million and adjusted earnings per share guidance is $1.40–$1.44. Fourth-quarter adjusted earnings per share guidance is $0.35–$0.39 (GEO release, 5 November 2026).
- Two large ICE contracts were added. A 10-year Big Spring, Texas agreement, effective 1 November 2026, is expected to generate about $200 million of annual revenue. A new 10-year Tacoma, Washington contract, effective 28 October 2026, is expected to generate about $140 million a year (GEO release, 5 November 2026).
- Corporate debt is down to one bond. After the $650 million 8.625% secured notes were redeemed, corporate debt is $625 million of 10.250% senior unsecured notes due 2031. Available liquidity is about $600 million (GEO release, 5 November 2026).
- The buyback is large against the share count. GEO has repurchased about 10.1 million shares for about $177 million. About $1.07 billion remains under the $1.25 billion authorization, and about 132 million shares are outstanding (GEO release, 5 November 2026).
- An analyst raised its target after the report. Jones Trading maintained a Buy rating and raised its price target to $42.75 on 6 November 2026.
Bear case
- Federal funding is the central risk. Benzinga reported on 4 November 2026 that GEO and CoreCivic shares fell after Democrats won in the midterm elections. The stopgap spending bill expires on 11 December 2026, and a lapse or cut would reset expectations for detention funding.
- Revenue missed the consensus estimate. Revenue of $761.06 million compared with an analyst estimate of $783.08 million, according to a 5 November 2026 market-data report. It was inside the company's own $755–$805 million range.
- Guidance no longer includes a like-for-like GAAP figure. The company now guides to net income attributable to GEO Operations of $726.3–$730.5 million for the year, which includes the Adelanto sale gain, and to adjusted earnings per share (GEO release, 5 November 2026).
- Further facility sales are not agreed. On 5 November 2026 management said it is in an active process to sell other company-owned facilities to ICE, with no definitive agreement and no timeline. Any sale would change the facility income behind the current guidance.
- Insiders have sold shares. SEC Form 4 filings show four open-market sales between 13 August 2026 and 11 September 2026, at prices of $31.30 to $32.00. Matthew Albence sold 11,797 shares at $31.45 on 11 September 2026, and Ronald Brack sold 7,000 shares at $32.00 on 21 August 2026. Four filings are too few to support a conclusion.
- Detention scrutiny continues. The San Francisco Chronicle's report on ICE investigations of detainee deaths was republished on 6 November 2026.
Price setup
The shares closed at $32.22 on 12 November 2026, 3.3% below the 52-week intraday high of $33.31 reached on 11 November 2026. The three-month price change is 3.2%, measured from the $31.22 close on 14 August 2026. The 52-week closing low is $13.26, from 20 February 2026.
The November rally was fast. Closes rose from $25.17 on 5 November 2026 to $27.80 on 6 November 2026, $30.14 on 9 November 2026, $31.94 on 10 November 2026 and $32.72 on 11 November 2026. No company news in that window explains the move beyond the 5 November 2026 report and the contract announcements.
The 50-day moving average is $30.07 and the 200-day moving average is $24.79, both as of the 12 November 2026 close. The shares are above both. The range from late August to mid-September, when insiders sold at $31.30 to $32.00, sits just under the current price.
No earnings date falls in the next 30 days. Price moves are more likely to follow budget news and contract announcements.
Catalysts ahead
- 11 December 2026: Stopgap spending bill expires. A lapse, extension or full-year appropriations bill resets expectations for federal detention funding, the main driver of the shares.
- 31 December 2026: Management's year-end activation target for Big Horn and Rivers. A disclosed delay would push back the early-2027 earnings contribution from the two ICE support contracts, which together are expected to bring about $165 million of annual revenue.
What would change the view
A daily close below $25.75, which would return the shares to their level before the 5 November 2026 report and erase the November rally. A disclosed Big Horn or Rivers activation delay past 31 December 2026, or a cancelled ICE contract, would also break the case.
The risks this note tracks, each with what would confirm it:
- The post-midterm political balance leads to reduced federal funding for immigration detention. Confirmed by: appropriations language or a spending agreement that cuts ICE detention funding, or a funding lapse after 11 December 2026.
- Further sales of owned facilities to ICE lower facility income in a way the company has not quantified. Confirmed by: a definitive sale agreement without guidance on post-sale earnings, or 2027 guidance below the current run rate.
- Big Horn, Rivers or Big Spring activation slips past management's targets. Confirmed by: GEO discloses activation after 31 December 2026 for Big Horn or Rivers, or after the first quarter of 2027 for Big Spring.
- Share issuance offsets the buyback. Confirmed by: a new equity offering, or a share count that rises above about 132 million in the next quarterly filing.
What it trades with
GEO shares move with CoreCivic and with political news on US immigration enforcement. Both fell after the midterm results, according to Benzinga on 4 November 2026. Funding and appropriations headlines have driven the shares more than the economic cycle, so the S&P 500 is a weak guide to short-term moves.
The evidence, claim by claim (8)
- Third-quarter 2026 revenue was $761.1 million, up 12% from $682.3 million; adjusted EBITDA was $145.3 million, up 21%; GAAP earnings per share $0.37 and adjusted earnings per share $0.39. GEO third-quarter 2026 release · as of
- Full-year 2026 guidance: adjusted earnings per share $1.40–$1.44, adjusted EBITDA $568–$573 million, revenue $2.975–$3.025 billion; fourth-quarter adjusted earnings per share $0.35–$0.39. GEO third-quarter 2026 release · as of
- Quarterly revenue of $761.06 million against $682.34 million a year earlier, for the period ended 30 September 2026. GEO 10-Q filed 6 November 2026 (SEC XBRL) · as of
- A 10-year Big Spring, Texas ICE agreement is expected to generate about $200 million of annual revenue; a new 10-year Tacoma contract about $140 million a year. GEO third-quarter 2026 release · as of
- Big Horn (about $85 million annual revenue) and Rivers (about $80 million) are expected to activate by the end of 2026 and reach normal operations in early 2027. GEO third-quarter 2026 release · as of
- About 10.1 million shares repurchased for about $177 million; about $1.07 billion remains under the $1.25 billion authorization; about 132 million shares outstanding. GEO third-quarter 2026 release · as of
- Revenue of $761.06 million compared with an analyst estimate of $783.08 million. StockStory, 5 November 2026 earnings report · as of
- Jones Trading maintained a Buy rating and raised its price target on GEO to $42.75. Jones Trading, reported by market news feeds · as of
Sources
- The GEO Group Reports Third Quarter 2026 Results and Updates Full Year 2026 Guidance · finviz.com ·
- GEO Group (NYSE:GEO) misses Q3 2026 revenue estimates · stockstory.org
- GEO Q3 Revenue Rises 12% to $761 Million; Debt Reduced by $650 Million · panabee.com
- GEO Group beats on earnings but misses on revenue as contract pipeline and Adelanto sale reshape the setup · finviz.com