Is The GEO Group, Inc. overvalued or undervalued?

As of 13 December 2024, The GEO Group, Inc. has moved from an expensive to a very expensive valuation grade. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 35, significantly higher than the industry average of approximately 31.1, while its EV to EBITDA ratio is 9.25, which is also elevated compared to peers like Ladder Capital Corp. at 2.50 and American Assets Trust, Inc. at 3.77. Additionally, the PEG ratio of 8.06 suggests that the stock is priced for growth that may not materialize.
In comparison to its peers, The GEO Group, Inc. exhibits a higher valuation profile, with a ROCE of 22.86% and an ROE of 8.42%, but these returns do not justify the premium pricing relative to its competitors. The company's stock has underperformed against the S&P 500 in the recent month, with a return of -12.60% compared to the index's 3.83%. Overall, the current valuation metrics indicate that The GEO Group, Inc. is overvalued in the current market environment.