CoreCivic (CXW): Evaluating If Shares are Undervalued After Recent Weak Performance

CoreCivic (CXW) has been navigating a challenging stretch, with the stock slipping 8% in the past week and posting a decline of 17% over the past 3 months. Despite recent pressure, the company’s annual revenue and net income growth remain in positive territory.

See our latest analysis for CoreCivic.

CoreCivic’s share price has struggled to gain traction lately, retreating over the past three months and leading to a 21% decline year-to-date. Despite the recent negative momentum, the company still retains a robust long-term track record, with total shareholder returns up 154% over five years. This demonstrates how much long-term patience can pay off in this sector.

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With shares trading nearly 30% below their estimated intrinsic value, investors may wonder whether CoreCivic is currently undervalued or if the market is already factoring in the company's future growth. Is this a buying opportunity, or is everything already reflected in the share price?

Most Popular Narrative: 42.8% Undervalued

CoreCivic’s last close of $17.08 stands well below the most popular narrative’s estimated fair value of $29.88, a gap that has investors paying attention. The current setup hints at strong upside potential if the company delivers on key growth initiatives in the coming years.

“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 the full story behind this valuation? There is a hidden financial play unfolding: bold revenue and earnings leaps, shrinking share count, and margin expansion are key ingredients. Discover the make-or-break assumptions and see what really powers the bullish view.

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 government policy or contract renewals could quickly reduce revenue and present challenges for CoreCivic’s future growth outlook.

Find out about the key risks to this CoreCivic narrative.

Build Your Own CoreCivic Narrative

If you see the numbers differently or have your own perspective, dive into the data and craft a unique narrative 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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