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The GEO Group, Inc. (GEO)
Intrinsic Value (DCF)
Current$17.49
→
Intrinsic$9.21
-47%
$2.22$9.21$22.51
Market implies 16% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $17, the market prices in continued high-teens cash flow growth (16%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $2 → Bull $23. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $13 | $16 | $18 | $21 |
| 10% | $6 | $7 | $9 | $11 |
| 12% | $2 | $3 | $4 | $6 |
| 14% | $0 | $0 | $1 | $2 |
Bull Case
- Bull case ($23) offers 29% upside at 10% growth, 9% discount
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($2) implies 87% downside at 6% growth, 12% discount
- Price reflects 16% growth expectations vs 8% historical — high bar to clear
- Trading 47% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$176.63M
Year 2$190.76M
Year 3$206.02M
Year 4$222.50M
Year 5$240.30M
Terminal$3.54B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$163.54MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.