As of December 15, 2025, Geo Group Inc's estimated intrinsic value ranges from $3.79 to $35.08 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $34.53 | +105.2% |
| Discounted Cash Flow (5Y) | $32.33 | +92.1% |
| Dividend Discount Model (Multi-Stage) | $3.79 | -77.5% |
| Dividend Discount Model (Stable) | $35.08 | +108.4% |
| Earnings Power Value | $32.00 | +90.1% |
Is Geo Group Inc (GEO) undervalued or overvalued?
With the current market price at $16.83, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Geo Group Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.64 | 0.87 |
| Cost of equity | 6.8% | 9.8% |
| Cost of debt | 7.0% | 7.1% |
| Tax rate | 25.1% | 26.3% |
| Debt/Equity ratio | 0.73 | 0.73 |
| After-tax WACC | 6.2% | 7.9% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $32 | $5,871M | 85.2% |
| 10-Year Growth | $35 | $6,177M | 70.4% |
| 5-Year EBITDA | $23 | $4,551M | 80.9% |
| 10-Year EBITDA | $26 | $5,028M | 63.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $402M |
| Discount Rate (WACC) | 7.9% - 6.2% |
| Enterprise Value | $5,116M - $6,531M |
| Net Debt | $1,370M |
| Equity Value | $3,746M - $5,161M |
| Outstanding Shares | 139M |
| Fair Value | $27 - $37 |
| Selected Fair Value | $32.00 |
| Metric | Value |
|---|---|
| Market Capitalization | $2343M |
| Enterprise Value | $3713M |
| Trailing P/E | 9.84 |
| Forward P/E | 75.88 |
| Trailing EV/EBITDA | 12.25 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 0.73 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $10.36 |
| Discounted Cash Flow (5Y) | 25% | $8.08 |
| Dividend Discount Model (Multi-Stage) | 20% | $0.76 |
| Dividend Discount Model (Stable) | 15% | $5.26 |
| Earnings Power Value | 10% | $3.20 |
| Weighted Average | 100% | $27.66 |
Based on our comprehensive valuation analysis, Geo Group Inc's intrinsic value is $27.66, which is approximately 64.4% above the current market price of $16.83.
Key investment considerations:
Given these factors, we believe Geo Group Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.