Does CoreCivic's West Tennessee ICE Contract Unlock New Earnings Visibility for CXW?

• CoreCivic announced it has secured a new contract through an intergovernmental services agreement between the City of Mason, Tennessee, and U.S. Immigration and Customs Enforcement to resume operations at its 600-bed West Tennessee Detention Facility, with expected full-year revenue of approximately US$30 million to US$35 million once fully activated.
• This marks a major reactivation of a facility that had been idle since September 2021 and provides CoreCivic with added earnings visibility through at least August 2030, based on the contract terms and potential extensions.
• We'll now explore how this new ICE contract may strengthen CoreCivic's earnings narrative by unlocking previously idled facility capacity.

We've found 19 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

CoreCivic Investment Narrative Recap

Shareholders in CoreCivic need conviction in the continued prioritization of federal detention, sustained government funding, and the company’s ability to capture incremental revenue from idle facilities. The new West Tennessee Detention Facility contract delivers added near-term revenue clarity, but the business remains exposed to potential contract, regulatory, and policy risks, particularly concerning its high dependence on ICE and federal agencies. At this point, the contract strengthens the short-term earnings outlook without fundamentally altering the biggest risk: the concentration of revenue and sensitivity to government policy shifts.

The raised full-year 2025 guidance, up to US$124.4 million in net income, closely follows the new contract’s announcement and reinforces the increased earnings visibility that comes with activating idle capacity. While this reactivation is expected to be accretive to earnings starting in the fourth quarter of 2025, the extent of long-term benefit hinges on ongoing federal priorities and broader government contracting trends.

However, investors should also take note that if federal priorities or major contract terms change, the company’s revenue and margin profile could be quickly affected...

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 assumes an 11.7% annual revenue growth rate and a $148.2 million increase in earnings from the current $104.0 million.

Uncover how CoreCivic's forecasts yield a $31.50 fair value, a 51% upside to its current price.

Exploring Other Perspectives

Three individual Simply Wall St Community fair value estimates for CoreCivic range widely, from as low as US$9.58 to as high as US$48.09 per share. With several recognizing the role of rising federal detention spending as a key catalyst, you can compare different viewpoints to see how market participants are thinking about CoreCivic’s future.

Explore 3 other fair value estimates on CoreCivic - why the stock might be worth less than half the current price!

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.

Ready To Venture Into Other Investment Styles?

Our daily scans reveal stocks with breakout potential. Don't miss this chance:

• Trump has pledged to "unleash" American oil and gas and these 22 US stocks have developments that are poised to benefit.
• Uncover the next big thing with financially sound penny stocks that balance risk and reward.
• This technology could replace computers: discover 24 stocks that are working to make quantum computing a reality.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com