Why CoreCivic (CXW) Is Down 8.0% After Securing Major Contracts to Reactivate Idle Facilities

• CoreCivic announced in late September and early October 2025 that it has secured several major new contracts to reactivate and operate over 6,300 beds at previously idle correctional facilities, including the 2,160-bed Diamondback Correctional Facility, the California City Immigration Processing Center, and the Midwest Regional Reception Center, through multi-year agreements with U.S. Immigration and Customs Enforcement (ICE) and the Oklahoma Department of Corrections.
• This expansion is expected to add nearly US$300 million in additional annual revenue once all facilities are fully activated, transforming idle assets into meaningful revenue streams for the company.
• We'll examine how the activation of the long-idle Diamondback Correctional Facility could reshape CoreCivic's investment narrative and revenue outlook.

Find companies with promising cash flow potential yet trading below their fair value.

CoreCivic Investment Narrative Recap

CoreCivic is a company whose appeal to shareholders hinges on confidence in sustained federal and state reliance on private detention solutions, as well as the company’s ability to consistently secure and activate large-scale contracts and achieve stable occupancy rates. The recent news of multi-year contracts to reactivate over 6,300 beds, including the Diamondback Correctional Facility, is a significant near-term catalyst, but it does not materially reduce the business’s biggest risk: CoreCivic's high dependence on a small number of government agencies and the policy or regulatory shifts that could impact contract renewals or revenue visibility.

The most relevant recent announcement is the new five-year contract for the Diamondback Correctional Facility, idle since 2010, which is expected to contribute about US$100 million in annual revenue once fully operational. This contract, part of contracts totaling nearly US$300 million in incremental revenue, directly supports the main short-term catalyst of rapid revenue growth through increased federal funding and capacity utilization, but it is still subject to the inherent risks of policy change and government contract concentration.

However, despite these expansions, investors should be aware that if contract priorities or government policies shift, CoreCivic’s revenue exposure could rapidly change...

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

CoreCivic's outlook anticipates $2.8 billion in revenue and $252.2 million in earnings by 2028. This scenario relies on an annual revenue growth rate of 11.7% 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 51% upside to its current price.

Exploring Other Perspectives

Three retail investors from the Simply Wall St Community estimate CoreCivic's fair value at anywhere between US$9.58 and US$47.21 per share. While opinions differ widely, the risk of government policy or contract renewal changes remains a key factor influencing the outlook for CoreCivic’s performance and long-term value.

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.

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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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