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CoreCivic Inc (CXW)
NYSE:CXW
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CoreCivic
(NYSE:CXW)
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Rating:65Neutral
Price Target:
$21.50
▲(7.99% Upside)
Action:DowngradedDate:02/21/26
The score is primarily supported by improving financial results and a constructive earnings call with strong 2026 guidance, ample liquidity, and active share repurchases. This is tempered by rising leverage/variability in financial quality and weaker technical positioning (below key moving averages with negative MACD), while valuation appears reasonable but not clearly compelling based on the provided P/E and no dividend yield data.
Positive Factors
Contracted government revenue and real-estate leasing
CoreCivic’s core business is built on long-term government contracts and lease arrangements, providing recurring, contractually backed cash flows and predictable occupancy levers. The mix of managed services and lease revenue anchors revenue durability versus pure commercial demand cycles.
Recent revenue and profit re-acceleration
Revenue re-acceleration and stronger profitability (net margin improvement and a large free cash flow rebound) indicate operational recovery and improving cash generation. This strengthens the company’s ability to fund maintenance, activations, and shareholder returns over the medium term.
Expanded liquidity and financing flexibility
A materially larger revolver and roughly $409M total liquidity reduce near-term refinancing risk and provide capital for facility activations and working capital. Combined with moderate net leverage (~2.8x), this supports execution of growth initiatives and mitigates short-term funding shocks.
Negative Factors
High federal/ICE revenue concentration
A majority of revenue tied to federal customers—particularly ICE—creates structural sensitivity to enforcement policy, appropriations, and population trends. Large customer concentration raises downside risk to occupancy, contract renegotiations, and revenue predictability if federal demand shifts.
Rising leverage and increased capital structure risk
Leverage has moved higher year-over-year, increasing sensitivity to interest rates and refinancing cycles. Elevated debt relative to equity constrains financial flexibility for opportunistic investments or prolonged start-up losses and raises the risk of margin pressure if cash flows soften.
Activation timing, start-up losses and margin volatility
New facility activations have generated start-up losses and compressed margins; timing uncertainty (e.g., delayed Midwest activation) can defer anticipated revenue and lengthen payback periods. Persistent margin variability undermines predictability of free cash flow and AFFO sustainability.
CoreCivic (CXW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.95B
Dividend YieldN/A
Average Volume (3M)1.17M
Price to Earnings (P/E)18.6
Beta (1Y)1.28
Revenue Growth5.72%
EPS Growth47.75%
CountryUS
Employees11,649
SectorIndustrials
Sector Strength72
IndustryREIT - Specialty
Share Statistics
EPS (TTM)0.26
Shares Outstanding97,709,230
10 Day Avg. Volume1,137,486
30 Day Avg. Volume1,167,939
Financial Highlights & Ratios
PEG Ratio0.23
Price to Book (P/B)1.46
Price to Sales (P/S)0.92
P/FCF Ratio37.90
Enterprise Value/Market Cap1.63
Enterprise Value/Revenue1.43
Enterprise Value/Gross Profit6.10
Enterprise Value/Ebitda9.09
Forecast
1Y Price Target
$30.00Price Target Upside50.68% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1.49
Revenue Forecast (FY)$2.56B
CoreCivic Business Overview & Revenue Model
Company DescriptionCoreCivic, Inc. owns and operates partnership correctional, detention, and residential reentry facilities in the United States. It operates through three segments: CoreCivic Safety, CoreCivic Community, and CoreCivic Properties. The company provides a range of solutions to government partners that serve the public good through corrections and detention management, a network of residential reentry centers to help address America's recidivism crisis, and government real estate solutions. Its correctional, detention, and residential reentry facilities offer rehabilitation and educational programs, including basic education, faith-based services, life skills and employment training, and substance abuse treatment. As of December 31, 2021, the company owned and operated 46 correctional and detention facilities, 26 residential reentry centers, and 10 properties for lease. The company was founded in 1983 and is based in Brentwood, Tennessee.
How the Company Makes MoneyCoreCivic makes money primarily by contracting with government agencies to provide capacity and services for incarcerated/detained populations and by monetizing its facility real estate through lease arrangements. Key revenue streams include: (1) Managed services contracts: The company is paid under agreements with federal, state, and local government agencies to manage correctional and/or detention operations. Compensation is generally tied to providing staffing, security, food, healthcare coordination (where applicable), and facility operations; economics are influenced by factors such as populations/occupancy, per-diem or similar rate structures, contract terms, and facility-level operating costs. (2) Facility leasing (real estate): In some arrangements, CoreCivic acts more like a landlord by leasing facilities to government agencies, generating rental/lease revenue rather than (or in addition to) operating revenue. This model monetizes owned real estate and can include long-term lease terms depending on the agreement. (3) Other services: The company has also generated revenue from ancillary and support offerings tied to justice and reentry needs (to the extent provided under contract), which may include administrative or programmatic services depending on customer requirements. Revenue concentration and performance are significantly influenced by government budgeting and procurement decisions, contract renewals/rebids, regulatory and policy changes affecting detention/corrections usage, and the company’s ability to keep facilities occupied under contracts or leases. Specific partnerships: null.
CoreCivic Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed materially positive operational and financial momentum — strong Q4 outperformance, significant ICE-driven revenue growth, multiple facility reactivations, robust 2026 guidance and ample liquidity — tempered by execution and timing risks: a notable activation delay (Midwest Regional), start-up losses that pressured margins, and concentration risk tied to ICE. On balance the highlights (substantial revenue/profit gains, clear activation pipeline and strong balance sheet actions) outweigh the lowlights.Q4-2025 Updates
Positive Updates
Strong Q4 Financial Outperformance
Adjusted EPS of $0.27 in Q4 2025 vs $0.16 in Q4 2024, up 69%; normalized FFO per share $0.52 vs $0.39, up 33%; adjusted EBITDA $92.5M vs $74.2M, up 25%. Adjusted EPS beat analyst estimates by $0.09 and adjusted EBITDA beat by $9M.
Federal Revenue Surge Driven by ICE
Federal partners comprised 57% of Q4 revenue; federal revenue increased 49% YoY. ICE revenue rose $124.4M or 103.4% YoY, fueling the majority of the top-line improvement.
Occupancy and Population Growth
Average daily population increased to 56,380 in Q4 2025 vs 50,202 in Q4 2024 (+12.3%); total Safety & Community occupancy at 78.1%, up 2.6 percentage points year-over-year.
Reactivations and Near-Term Revenue Run-Rate
Three of four previously idle facilities are receiving populations; the three new H2 2025 contract awards (excluding Midwest Regional) are expected to generate ~ $260M of annual revenue once normalized. Company expects a 2026 annual revenue run-rate of ~ $2.5B and an EBITDA run-rate of ~ $450M (almost $100M YoY improvement) once stabilizations complete.
Balance Sheet Flexibility and Liquidity
Expanded revolving credit facility from $275M to $575M; total bank commitments $700M (including $125M term loan). Cash on hand $97.9M and incremental borrowing capacity $311.4M for total liquidity of ~$409.3M. Net debt-to-adjusted EBITDA of 2.8x (TTM).
Aggressive Share Repurchase Program
Repurchased 5.3M shares in Q4 for $97.3M; YTD repurchases 11.2M shares for $218.4M. Since 2022 repurchases total 25.7M shares for $399.5M ($15.52/share). Board authorization increased, with $300.5M remaining under authorization and cumulative authorization up to $700M.
2026 Guidance and Cash Flow Outlook
2026 guidance: diluted EPS $1.49–$1.59; FFO per share $2.54–$2.64; EBITDA $437M–$445M. AFFO forecast $245M–$259.3M; maintenance CapEx $60M–$70M, activation-related CapEx $35M–$40M. Guidance implies midpoint EBITDA and EPS growth of approximately 21% and 40% respectively year-over-year (at midpoint).
Operational Quality and Accreditations
Multiple facilities achieved exemplary outcomes at ACA reaccreditation hearings (three correctional facilities and three residential reentry facilities with near-perfect scores). Dilley facility re-contracted through 2030 with federal monitoring and performance standards.
Negative Updates
Midwest Regional Activation Delay and Legal Uncertainty
Midwest Regional Reception Center (1,033 beds) intake remains delayed due to a special use permit dispute; company has filed a lawsuit and an SUP application. Midwest was disclosed as ~ $60M of potential annual revenue and would be upside to 2026 guidance if activated.
Operating Margin Pressure from Activations
Combined operating margin for Safety & Community was 22.2% in Q4 2025 vs 23.6% prior year. Excluding 4 facilities in activation stages, margin was 24.1%. Start-up losses at California City and Diamondback totaled $3.6M in Q4.
Decline in U.S. Marshals Revenue and Customer Mix Shift
Revenue from the U.S. Marshals Service decreased by $11.3M YoY, partially offsetting ICE gains. Federal revenue concentration remains high (57% of total), increasing exposure to ICE funding and policy variability.
Dependence on ICE Demand and Macro Timing Risk
Significant sensitivity to ICE detention population trends (nationwide ICE populations reached ~69,900 in early Jan 2026). Company manages ~23% of ICE populations (Dec 31, 2025) versus ~25% at year-end 2024; uncertain timing of enforcement ramp and bed demand could affect cadence of activations.
Start-up Costs and Near-Term Profitability Lags
Several recently activated/activating facilities incurred start-up losses and depressed margins in Q4, and guidance excludes potential upside from unfinalized awards (e.g., Midwest), creating near-term profit timing risk.
Market Valuation Perceived as Discount
Management highlighted shares trading near ~6x forward EBITDA (midpoint), well below historical ranges; while management is buying back stock, the depressed multiple signals investor skepticism and represents downside to liquidity deployment assumptions if market access is constrained.
Company Guidance
CoreCivic’s 2026 guidance calls for diluted EPS of $1.49–$1.59, FFO per share of $2.54–$2.64 and EBITDA of $437M–$445M (management notes stabilized annual revenue run‑rate of ~$2.5B and an EBITDA run‑rate of ~$450M once recent activations normalize); adjusted funds from operations (AFFO) are forecast at $245M–$259.3M, G&A $160M–$165M, and an annual effective tax rate of 25%–30%. Capital spending is planned at $60M–$70M for maintenance CapEx, $15M for other CapEx, and $35M–$40M for activation/growth CapEx (including $23.5M carryover from 2025); Q1 is modeled seasonally weaker (~$0.04/share headwind vs Q4 from fewer days, utilities and ~75% of annual unemployment taxes), California City and Diamondback are expected to reach profitability in Q1, and the guidance excludes Midwest Regional ramp (Midwest ~ $60M annual revenue) and any unannounced contract awards. Management emphasized prioritizing share repurchases within AFFO, while pointing to supporting liquidity and leverage (net debt/adjusted EBITDA ~2.8x, cash $97.9M, revolver availability/borrowing capacity $311.4M, total liquidity ~$409.3M).CoreCivic Financial Statement Overview
Summary
Fundamentals improved in the most recent year with faster revenue growth, better profitability, and a sharp rebound in free cash flow. Offsetting this, leverage increased year over year and both margins and cash conversion have been variable over time, reducing stability.Income Statement
Revenue has re-accelerated, with ~6.0% growth in 2025 versus low-single-digit growth in 2023–2024. Profitability also improved year over year: net margin rose to ~5.3% in 2025 from ~3.5% in 2024, and operating profitability strengthened. Offsetting this, margins remain moderate for the period and have shown volatility over the cycle (including a net loss in 2021), which tempers the quality-of-earnings profile.68
Positive
Balance Sheet
Leverage is meaningful: debt remains high at roughly 0.87x equity in 2025 (up from ~0.68x in 2024), indicating a more levered capital structure than the prior year. Equity is still solidly positive, and profitability on equity improved to ~8.3% in 2025 from ~4.6% in 2024. The main weakness is the upward move in leverage and the historically higher leverage levels earlier in the period, which increases sensitivity to refinancing and rate conditions.56
Neutral
Cash Flow
Free cash flow improved sharply in 2025 (up ~72%), and cash generation is strong relative to reported earnings in 2025 (free cash flow roughly matches net income). However, operating cash flow fell in 2025 versus 2024, and the company’s ability to cover earnings with operating cash flow has been inconsistent over time, reflecting some variability in cash conversion.64
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.21B | 1.96B | 1.90B | 1.85B | 1.86B |
| Gross Profit | 518.65M | 468.29M | 306.89M | 431.54M | 525.55M |
| EBITDA | 348.31M | 287.39M | 296.10M | 378.18M | 306.38M |
| Net Income | 116.50M | 68.87M | 67.59M | 122.32M | -51.90M |
Balance Sheet | |||||
| Total Assets | 3.26B | 2.93B | 3.11B | 3.24B | 3.50B |
| Cash, Cash Equivalents and Short-Term Investments | 112.45M | 107.49M | 121.84M | 149.40M | 299.64M |
| Total Debt | 1.22B | 1.01B | 1.21B | 1.39B | 1.69B |
| Total Liabilities | 1.85B | 1.44B | 1.63B | 1.81B | 2.13B |
| Stockholders Equity | 1.41B | 1.49B | 1.48B | 1.43B | 1.37B |
Cash Flow | |||||
| Free Cash Flow | 53.97M | 197.98M | 161.65M | 72.19M | 182.35M |
| Operating Cash Flow | 194.59M | 269.15M | 231.90M | 153.58M | 263.23M |
| Investing Cash Flow | -206.08M | -53.82M | -58.87M | 73.04M | 238.42M |
| Financing Cash Flow | 1.82M | -222.18M | -206.24M | -375.16M | -327.71M |
CoreCivic Technical Analysis
Positive
19.91
Price Trends
18.73
Positive
18.51
Positive
19.45
Positive
Market Momentum
0.35
Negative
58.32
Neutral
76.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CXW, the sentiment is Positive. The current price of 19.91 is above the 20-day moving average (MA) of 18.22, above the 50-day MA of 18.73, and above the 200-day MA of 19.45, indicating a bullish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 58.32 is Neutral, neither overbought nor oversold. The STOCH value of 76.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CXW.
CoreCivic Risk Analysis
CoreCivic disclosed 43 risk factors in its most recent earnings report. CoreCivic reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CoreCivic Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $4.09B | 13.80 | 11.81% | 7.05% | 2.93% | -0.87% | |
65 Neutral | $1.95B | 18.58 | 8.00% | ― | 5.72% | 47.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $4.68B | 27.51 | 21.63% | 5.02% | -1.48% | -50.05% | |
57 Neutral | $1.89B | -946.00 | -0.58% | 3.42% | 12.57% | 4.92% | |
54 Neutral | $1.89B | 1.02 | -132.88% | ― | 38.93% | 952.55% |
* Industrials Sector Average
CXW
CoreCivic
19.46
-0.55
-2.75%
EPR
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50.46
2.35
4.88%
OUT
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26.29
10.96
71.47%
UNIT
Uniti Group
7.51
-0.77
-9.30%
SMA
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31.78
0.40
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.