A Look at CoreCivic's Valuation Following New Diamondback Correctional Facility Contract

CoreCivic has secured a new five-year contract with the Oklahoma Department of Corrections and U.S. Immigration and Customs Enforcement to reopen the Diamondback Correctional Facility, which has been inactive since 2010. This deal positions the company for an expected $100 million in annual revenue once the facility is fully ramped up.

See our latest analysis for CoreCivic.

CoreCivic’s share price has seen some swings lately, with a recent dip of nearly 14% over the past month even as the new Diamondback agreement grabs headlines. Still, zooming out reveals momentum is very much intact, as the stock’s total return has soared 32% over the past year and more than doubled over three years. This hints that investors remain optimistic about the company’s long-term outlook despite some short-term volatility.

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Given CoreCivic’s discounted share price compared to analyst targets, along with its jump in revenues and earnings, the question now is whether there is value waiting to be unlocked or if the market has already factored in future growth.

Most Popular Narrative: 39.2% Undervalued

Compared to CoreCivic’s last close price of $18.17, the most widely followed narrative signals a fair value of $29.88. This substantial gap stands out in today’s market. Analysts supporting this view are paying special attention to the company’s ability to capitalize on new government contracts and facility reactivations as a major source of future upside.

“The unprecedented increase in mandatory government funding for federal detention and border security (notably, $75 billion for ICE and multi-year appropriations through 2029) is catalyzing rapid contracting activity, reactivation of idle facilities, and will significantly boost CoreCivic's recurring revenue and occupancy rates in future quarters.”

Read the complete narrative.

Want to know what powers this aggressive fair value? The answer lies in bold analyst assumptions around top-line growth and surging margins as government contracts expand. The most intriguing detail: a future outlook that rivals fast-growing tech companies. Don’t miss the figures shaping this ambitious target.

Result: Fair Value of $29.88 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifts in federal policy or loss of major government contracts could quickly undermine CoreCivic's growth trajectory. This would make future revenues far less predictable.

Find out about the key risks to this CoreCivic narrative.

Build Your Own CoreCivic Narrative

If you see things differently or want a deeper dive into the numbers, you can easily craft your own perspective in just a few minutes. Do it your way

A great starting point for your CoreCivic research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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