The GEO (US:GEO) The Motley Fool·2025-11-27 20:00Core Insights - GEO Group is experiencing a challenging period with litigation issues and a softened earnings outlook, despite securing record contracts and better-than-expected third-quarter results [1][6]. Company Overview - GEO Group is a leading provider of secure facility management and community reentry services, with a diversified revenue base across the U.S. and international markets [5]. - The company serves federal, state, and local government agencies, focusing on correctional, law enforcement, and immigration authorities [5]. - As of the latest market close, GEO's stock price is $15.58, with a market capitalization of $2.2 billion, revenue of $2.5 billion, and net income of $238.1 million for the trailing twelve months (TTM) [4]. Recent Developments - Apis Capital Advisors sold 394,000 shares of GEO during the third quarter, reducing its stake to 860,000 shares valued at $17.6 million [2][8]. - This sale represents 3.9% of Apis Capital Advisors' reportable assets under management (AUM), indicating a significant shift as GEO is no longer among the top five holdings [3][8]. - GEO's shares have declined 44% over the past year, underperforming the S&P 500, which has increased by 13% during the same period [3]. Financial Performance - GEO's revenue increased by 13% year-over-year, but the company has tightened its fourth-quarter guidance, projecting GAAP net income of $0.23 to $0.27 per share on revenue between $651 million and $676 million [9]. - The company recorded a $37.7 million non-cash reserve related to litigation claims involving detainees in custody [9]. - Despite these challenges, management highlights significant growth drivers for 2026, including 6,000 newly contracted ICE beds and expanded transportation services [9].