2023-10-03
Geo Group is a company specializing in the ownership, leasing, and management of secure facilities, including maximum, medium, and minimum-security facilities, processing centers, and community-based reentry facilities in the United States, Australia, and South Africa. They also offer innovative technologies, monitoring services, and treatment programs for community-based services, as well as secure transportation services. As of December 31, 2022, Geo Group managed approximately 82,000 beds across 102 facilities and provided reentry and electronic monitoring services to over 500,000 individuals worldwide.
$Geo has experienced a significant decline in its stock price over the past few years, with its all-time high (ATH) reaching $34. However, starting in 2022, there seems to be a potential turnaround, as the company's net income has surged by 122% compared to 2021. Despite this promising financial development, I am cautious about putting too much emphasis on $GEO's financials, as this sudden change has not been validated by additional data points. Instead, my primary focus will be on examining the business aspects of the situation.
Geo Group has established enduring partnerships with federal, state, and other government clients, bolstering their competitiveness in securing new contracts and maintaining existing ones. Their track record includes 36 years of service to the United States Federal Government, 34 years with the State of California, approximately 35 years with the State of Texas, 31 years with various Australian state government entities, and around 29 years with the State of Florida. These government relationships contributed significantly, accounting for about 78% of their consolidated revenues in the fiscal year ending December 31, 2022.
The influx of illegal migration, primarily involving middle-aged men, is once again on the rise in the strategically located facilities owned by Geo in the United States.
Geo Group is led by Executive Chairman George C. Zoley, who has overseen significant growth, with annual revenues increasing from $207.0 million in 1997 to approximately $2.4 billion in 2022. Dr. Zoley is an industry pioneer, having established one of the first public-private partnership secure services facilities in the U.S. in 1986. The leadership team also includes CEO Jose Gordo, who brings over 21 years of business experience, and CFO Brian R. Evans, with over 22 years at the company. The senior executives, on average, have a tenure of approximately 10 years, reflecting their commitment and expertise in Geo Group's operations.
Better Earnings
Rising Immigration