CoreCivic (CXW) Is Down 7.4% After Cutting 2025 Earnings Outlook Amid Margin Pressures

• CoreCivic revised its full-year 2025 earnings guidance downward after reporting third-quarter results, with net income now expected between US$107.0 million and US$113.0 million and diluted EPS between US$0.99 and US$1.05.
• Despite strong revenue gains and new government contracts, the lower profit outlook highlights continued near-term pressure on margins and overall profitability.
• We’ll examine how CoreCivic’s reduced earnings guidance may affect its long-term investment narrative and core business outlook.

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CoreCivic Investment Narrative Recap

To invest in CoreCivic, you need confidence that continued demand for secure detention, backed by sustained government funding and new contract wins, will offset near-term fluctuations in earnings. The company’s recent downward earnings guidance reflects margin pressure but does not appear to fundamentally shift the most important short-term catalyst: new government contracts ramping up occupancy and revenue. The biggest risk right now remains CoreCivic’s reliance on a few federal agencies, as adverse contract or policy changes could sharply impact financial results.

Among the latest announcements, the award of new contracts to activate previously idle facilities is closely connected to the current outlook, since these agreements are expected to generate nearly US$320 million in annual revenue once fully operational. These contracts are a key driver for upcoming revenue and may help offset some of the short-term margin pressure identified in the revised guidance.

Yet, despite the optimism around new contract growth, investors should also keep in mind the contract renewal risks...

Read the full narrative on CoreCivic (it's free!)

CoreCivic's outlook projects $2.8 billion in revenue and $252.2 million in earnings by 2028. This requires 11.7% annual revenue growth and a $148.2 million increase in earnings from the current $104.0 million.

Uncover how CoreCivic's forecasts yield a $29.88 fair value, a 71% upside to its current price.

Exploring Other Perspectives

Fair value estimates from the Simply Wall St Community range from US$23.87 to US$29.88, using three personal forecasts. While many see upside, reliance on key government contracts means changes in federal policy remain a critical consideration for anyone following CoreCivic’s story. Explore how your view compares to the wider community’s perspectives.

Explore 3 other fair value estimates on CoreCivic - why the stock might be worth just $23.87!

Build Your Own CoreCivic Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free CoreCivic research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate CoreCivic's overall financial health at a glance.

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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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