Tuesday, July 05, 2022
The GEO Group (GEO)
A USMS Contract Renewal
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
USMS Renewal. On Thursday, GEO reported that the U.S. Marshals Service has exercised the current contract option period to continue to utilize the 770-bed Western Region Detention Facility in San Diego, California, which is effective through September 30, 2023. The existing contract also has two additional two-year contract option periods, which if exercised by the USMS, would be effective through September 30, 2025 and September 30, 2027, respectively. GEO’s Western Region Detention Facility contract with the USMS had been operating under a 90-day contract extension which was scheduled to end on June 30, 2022.
A Precedent? Western was under a direct contract with the USMS. It was renewed in spite of the Executive Order given the lack of alternatives in the region, in our opinion. GEO has two additional direct contracts with the USMS, both expiring in 2023. Its possible we could see the same outcome at renewal, although it is too early to tell.…
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
