The GEO GroupMEX:GEO1 54 WACC % is 0.36% as of Jul. 01, 2026, which is 96% below its 10-year median of 8.05. GuruFocus rates MEX:GEO1 with a GF Score™ of 54/100 and a GF Value™ of MXN276.56 (Significantly Overvalued). The stock has 5 warning signs investors should review. Among 1,113 Business Services companies, The GEO Group ranks worse than 54.81% on this metric.
As of today (2026-07-01), The GEO Group's weighted average cost of capital is 0.36%%. The GEO Group's ROIC % is 7.08% (calculated using TTM income statement data).
The GEO Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
The GEO Group (MEX:GEO1) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, The GEO Group's weighted average cost of capital is 0.36%%. The GEO Group's ROIC % is 7.08% (calculated using TTM income statement data).
The GEO Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
The GEO Group WACC % Historical Data
* Premium members only.
The historical data trend for The GEO Group's WACC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Security & Protection Services subindustry, The GEO Group's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The GEO Group WACC % vs Business Services Industry
For the Business Services industry and Industrials sector, The GEO Group's WACC % distribution charts can be found below:
* The bar in red indicates where The GEO Group's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, The GEO Group's market capitalization (E) is MXN69172.770 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, The GEO Group's latest one-year quarterly average Book Value of Debt (D) is MXN32174.3082 Mil.
a) weight of equity = E / (E + D) = 69172.770 / (69172.770 + 32174.3082) = 0.6825
b) weight of debt = D / (E + D) = 32174.3082 / (69172.770 + 32174.3082) = 0.3175
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.461%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. The GEO Group's beta is -1.1605.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.461% + -1.1605 * 6% = -2.502%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, The GEO Group's interest expense (positive number) was MXN2864.235 Mil. Its total Book Value of Debt (D) is MXN32174.3082 Mil.
Cost of Debt = 2864.235 / 32174.3082 = 8.9022%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 1809.309 / 6729.293 = 26.89%.
The GEO Group's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.6825
*
-2.502%
+
0.3175
*
8.9022%
*
(1 - 26.89%)
=
0.36%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The GEO Group (MEX:GEO1) has a WACC % of 0.36% as of Jul. 01, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on The GEO Group and its competitors. This is 96% below median its historical median of 8.05. Over the past decade, The GEO Group's WACC % has ranged from 2.35 to 10.46. According to the industry distribution chart, The GEO Group ranks #610 out of 1113 companies in the Business Services industry, placing it in the top 54.8%.
Is The GEO Group's WACC % too high?
The GEO Group's current WACC % of 0.36% is 96% below median its 10-year median of 8.05. Over the past 10 years, this metric has ranged from a low of 2.35 to a high of 10.46. The Business Services industry median WACC % is 7.26. The GEO Group's value of 0.36% is 95% below this industry median. Based on the distribution chart, The GEO Group ranks #610 out of 1113 companies in the Business Services industry, which is below the industry midpoint. Overall, The GEO Group has a GF Score™ of 54/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does The GEO Group's WACC % compare to BCO and BRC?
According to the Business Services industry distribution chart, The GEO Group ranks #610 out of 1113 companies for WACC %. This places The GEO Group in the lower half of its industry. The industry median WACC % is 7.26. The GEO Group's value of 0.36% is 95% below this benchmark. Historically, The GEO Group's own WACC % has ranged from 2.35 to 10.46 over the past decade. While the company's 10-year median is 8.05 vs. the industry median of 7.26, The GEO Group has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Business Services company?
The median WACC % among Business Services companies is 7.26, based on 1,113 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The GEO Group's current WACC % of 0.36% is 95% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on The GEO Group and its competitors. For the Business Services industry, the median WACC % is 7.26 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The GEO Group's current WACC % is 0.36%, which is 96% below median its own 10-year median of 8.05. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The GEO Group stock overvalued right now?
Based on GuruFocus' analysis, The GEO Group (MEX:GEO1) is currently considered Significantly Overvalued. The stock's GF Value™ is MXN276.56, compared to a current price of MXN495.00 — trading 79% above its estimated fair value. The current WACC % is 0.36%, which is 96% below median its 10-year median of 8.05 and 95% below the Business Services industry median of 7.26. The GEO Group's overall GF Score™ is 54/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For The GEO Group (MEX:GEO1), the current WACC % is 0.36% as of Jul. 01, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The GEO Group (MEX:GEO1) Overvalued in 2026?
Based on GuruFocus' analysis, The GEO Group stock appears to be overvalued.
The current stock price of MXN495.00 is trading 79% above its estimated GF Value™ of MXN276.56.
GuruFocus considers The GEO Group to be Significantly Overvalued.
Key valuation signals for MEX:GEO1:
WACC %: 0.36% (96% below median its 10-year median of 8.05)
GF Value™: MXN276.56 vs. price of MXN495.00 (79% above fair value)
Industry Position: 95% below the Business Services median (#610 of 1113)
No single metric tells the full story. See the MEX:GEO1 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The GEO Group Inc specializes in detention facilities and community reentry centers. It operates in four segments: U.S. Secure Services, which mainly encompasses U.S.-based secure services business; Electronic Monitoring and Supervision Services, which conducts its services in the United States, represents services provided to adults for monitoring services and evidence-based supervision and treatment programs for community-based parolees, probationers, and pretrial defendants; Reentry Services conducts its services in the United States represents services provided to adults for residential and non-residential treatment, educational and community-based programs, pre-release and half-way house programs; and International Services. The company operates in U.S, Australia and South Africa.
54GF Score
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