Geo Group GEO shares soared 7.1% in the last trading session to close at $12.04. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 1.9% gain over the past four weeks.
The increased optimism in the stock is attributable to the improving operating fundamentals of its industry.
This private prison operator is expected to post quarterly funds from operations (FFO) of $0.55 per share in its upcoming report, which represents a year-over-year change of -15.4%. Revenues are expected to be $605.1 million, up 8.5% from the year-ago quarter.
While FFO and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in FFO estimate revisions and near-term stock price movements.
For Geo Group, the consensus FFO per share estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in FFO estimate revisions. So, make sure to keep an eye on GEO going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Geo Group is a member of the Zacks REIT and Equity Trust - Other industry. One other stock in the same industry, Alexander & Baldwin Holdings, Inc. ALEX, finished the last trading session 1.4% lower at $19.34. ALEX has returned 0.7% over the past month.
Alexander & Baldwin Holdings, Inc.'s consensus FFO per share estimate for the upcoming report has remained unchanged over the past month at $0.24. Compared to the company's year-ago FFO per share, this represents no change. Alexander & Baldwin Holdings, Inc. currently boasts a Zacks Rank of #3 (Hold).
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