Earnings Beat: CoreCivic, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Shareholders might have noticed that CoreCivic, Inc. (NYSE:CXW) filed its quarterly result this time last week. The early response was not positive, with shares down 4.2% to US$12.44 in the past week. It looks like a credible result overall - although revenues of US$490m were what the analysts expected, CoreCivic surprised by delivering a (statutory) profit of US$0.17 per share, an impressive 28% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CoreCivic after the latest results.

Check out our latest analysis for CoreCivic

Taking into account the latest results, the five analysts covering CoreCivic provided consensus estimates of US$1.92b revenue in 2024, which would reflect a small 2.5% decline over the past 12 months. Statutory earnings per share are forecast to plunge 32% to US$0.42 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.91b and earnings per share (EPS) of US$0.45 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$15.67, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic CoreCivic analyst has a price target of US$17.00 per share, while the most pessimistic values it at US$14.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting CoreCivic is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One more thing stood out to us about these estimates, and it's the idea that CoreCivic's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 5.0% to the end of 2024. This tops off a historical decline of 0.7% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.6% annually. So while a broad number of companies are forecast to grow, unfortunately CoreCivic is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that CoreCivic's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple CoreCivic analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that CoreCivic is showing 5 warning signs in our investment analysis , and 2 of those don't sit too well with us...

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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.