Investors in The GEO Group, Inc. (NYSE:GEO) had a good week, as its shares rose 2.3% to close at US$26.23 following the release of its full-year results. Statutory earnings per share fell badly short of expectations, coming in at US$0.22, some 35% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$2.4b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for GEO Group

Taking into account the latest results, the most recent consensus for GEO Group from five analysts is for revenues of US$2.66b in 2025. If met, it would imply a meaningful 9.9% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 433% to US$1.17. Before this earnings report, the analysts had been forecasting revenues of US$2.76b and earnings per share (EPS) of US$1.70 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The average price target climbed 11% to US$41.20despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on GEO Group, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$17.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that GEO Group's rate of growth is expected to accelerate meaningfully, with the forecast 9.9% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 0.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that GEO Group is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for GEO Group going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for GEO Group you should be aware of, and 1 of them can't be ignored.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.