Breaking Down CoreCivic, Inc. (CXW) Financial Health: Key Insights for Investors

You're looking at CoreCivic, Inc. (CXW) and seeing a stock that's been on a roller coaster, so the question is simple: is this a calculated bet on government need or a value trap tied to political risk? Honestly, the numbers for the 2025 fiscal year tell a story of powerful operational tailwinds, but with a few very real execution headwinds. In the third quarter of 2025 alone, CoreCivic pulled in a total revenue of $580.4 million, an 18.1% jump year-over-year, largely fueled by a massive 54.6% increase in revenue from U.S. Immigration and Customs Enforcement (ICE). That's a clear signal of demand. Still, management had to recently trim their full-year guidance, now projecting Adjusted EBITDA between $355 million and $359 million, down slightly due to the costs and delays that come with activating new facilities like the Diamondback Correctional Facility, which is expected to add another $100 million in annual revenue once fully online. This is a business where a new contract changes the math overnight, but you have to watch the cash flow-their Normalized Funds From Operations (FFO) per share is now guided between $1.94 and $2.00. We need to dig into what that FFO number really means for their debt paydown and the new $200 million share repurchase program they just authorized.

Revenue Analysis

You want to know where CoreCivic, Inc. (CXW) is actually making its money, and the short answer is that government demand, especially from federal partners, is driving a powerful near-term revenue surge. The company's financial health is directly tied to its contracts, and the latest 2025 data shows a clear acceleration. For the trailing twelve months ending September 30, 2025, CoreCivic's total revenue hit approximately $2.09 billion, marking a solid 5.72% year-over-year growth.

This growth isn't just steady; it's accelerating. The third quarter of 2025 alone saw total revenue jump to $580.4 million, an impressive 18.1% increase from the prior year quarter. That's a huge bump, and it tells you the market for their services is heating up, largely due to facility reactivations.

Core Revenue Streams: A Federal Focus

CoreCivic operates across three main segments: CoreCivic Safety (correctional and detention facilities), CoreCivic Community (residential reentry centers), and CoreCivic Properties (government real estate solutions). The Safety segment is the primary engine. In Q3 2025, federal partners-primarily U.S. Immigration and Customs Enforcement (ICE) and the U.S. Marshals Service-accounted for a significant 55% of CoreCivic's total revenue.

Here's the quick math on the major customer contributions in Q3 2025, which shows a defintely shifting landscape:

• ICE Revenue: This is the big story. ICE revenue shot up by 54.6% year-over-year to $215.9 million in Q3 2025. This was fueled by reactivating idle facilities to meet increased detention populations.
• U.S. Marshals Service: Revenue from the company's second-largest federal customer actually decreased by 5% in Q3 2025 compared to the prior year quarter.
• State Customers: Revenue from state customers saw a more modest increase of 5.2% in Q2 2025, largely driven by new contracts, such as those with the State of Montana.

Segment Contribution Snapshot (Q3 2025)

To get a clearer picture of where the money is coming from, you need to look at the business segments and the major government partners. The concentration of revenue in the federal sector, particularly with ICE, is both an opportunity and a risk.

Significant Changes and Near-Term Opportunity

The biggest change is the aggressive activation of previously idle facilities. The company has secured new contract awards at four facilities, which are expected to generate approximately $320 million in annual revenue once they hit stabilized occupancy, likely in 2026. Plus, the Q2 2025 acquisition of the Farmville Detention Center for $67 million is forecast to add around $40 million in annual incremental revenue. This is a clear, actionable strategy to convert unused capacity into revenue. What this estimate hides, though, is the start-up expenses that hit 2025 earnings, which is a near-term drag on profitability. You can read more about the long-term strategic direction here: Mission Statement, Vision, & Core Values of CoreCivic, Inc. (CXW).

The takeaway is simple: CoreCivic's revenue is on an upward trajectory, but it's heavily reliant on a few key government contracts, and ICE is the primary growth driver right now.

Profitability Metrics

You need to know if CoreCivic, Inc. (CXW) is just growing revenue or if that growth is actually hitting the bottom line. The short answer is: profitability is improving dramatically, but the company's net margin still lags the broader industry average, largely due to operational costs and a strategic investment in reactivating facilities. This is a classic 'growth-at-a-cost' scenario.

In the second quarter of 2025 alone, CoreCivic, Inc. reported total revenue of $538.2 million, with net income surging to $38.5 million. That represents a massive year-over-year net income increase of 103.4%. That's a huge jump. The full-year 2025 net income guidance is now projected to be between $116.4 million and $124.4 million.

Margin Analysis: CoreCivic vs. Industry

When we break down the margins, you can see exactly where the company makes its money and where it spends it. For Q2 2025, CoreCivic, Inc.'s gross profit margin stood at approximately 26.0%. This is the efficiency of their core service delivery-running the facilities. The operating profit margin (EBIT margin), which accounts for general and administrative expenses, settled at about 12.0%.

Here's the quick math on the key margins based on Q2 2025 data:

• Gross Profit Margin: 26.0% ($139.82M Gross Profit / $538.2M Revenue)
• Operating Profit Margin: 12.0% ($64.83M Operating Income / $538.2M Revenue)
• Net Profit Margin: 7.2% ($38.5M Net Income / $538.2M Revenue)

Now, let's look at the industry. The estimated 2025 net profit margin for the overall U.S. Correctional Facilities industry is around 12.4%. CoreCivic, Inc.'s 7.2% net margin is defintely below that industry average. However, their main competitor, GEO Group, reported a Q2 2025 net margin closer to 4.6% ($29.1 million net income on $636.2 million revenue). This comparison suggests CoreCivic, Inc. is outperforming its closest publicly traded peer, but the company-specific margin is depressed relative to the broader industry, which includes smaller, more specialized, or non-public entities.

Operational Efficiency and Margin Trends

The trend in profitability is clearly upward in 2025, driven by two factors: higher demand and operational efficiency. Increased demand from U.S. Immigration and Customs Enforcement (ICE) has been a primary catalyst, with CoreCivic's average daily population increasing. Increased occupancy is the single biggest lever for margin expansion in this business.

CoreCivic, Inc. is actively managing costs, but it's not without friction. Management has cited effective cost management initiatives. For example, the operating margin for the CoreCivic Safety segment improved to 26.2% in Q2 2025, up from 23.7% in the prior year quarter. Still, the company's full-year guidance was revised downward slightly in Q3, reflecting $10 million to $11 million of combined start-up costs associated with activating four previously idle facilities. These are necessary investments to capture future revenue, but they hit the near-term net profit margin. You have to accept a temporary drag on margins when a company is investing for growth.

For a deeper look at the market dynamics driving this demand, you should check out Exploring CoreCivic, Inc. (CXW) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You need to know how CoreCivic, Inc. (CXW) is funding its operations and growth, because a company's debt load is a direct measure of its financial flexibility and risk. The good news is that CoreCivic, Inc. maintains a relatively conservative capital structure, leaning more on equity than its closest competitor.

As of mid-2025, CoreCivic, Inc.'s total debt stood at approximately $1.02 billion USD. The vast majority of this is long-term debt, which is typical for a capital-intensive real estate company. Specifically, the net long-term debt was about $1,006.6 million in the second quarter of 2025, with only a small current portion of long-term debt (the short-term component) at $13.9 million. They are not carrying a lot of near-term refinancing risk.

The key metric here is the Debt-to-Equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of its shareholders' equity. CoreCivic, Inc.'s D/E ratio as of June 30, 2025, was approximately 0.69. This means for every dollar of shareholder equity, the company has about 69 cents of debt. That's a healthy number for an owner of real estate assets, which often requires significant borrowing.

Here's the quick math on how CoreCivic, Inc.'s leverage compares to its primary peer:

CoreCivic, Inc.'s D/E of 0.69 is significantly lower than The GEO Group's 1.29, indicating a much less aggressive use of debt financing. This lower leverage is a sign of financial strength and resilience. Also, their net debt to trailing twelve-month Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was a strong 2.5x in Q1 2025, a level that suggests excellent credit quality, even without a formal credit rating update in the latest filings.

The company's recent actions show a clear preference for returning capital to shareholders over taking on new debt for growth. Instead of issuing new debt in 2025, they have been focused on equity funding via repurchases, which shrinks the share count and boosts earnings per share. This is a defintely bullish signal for investors.

• Repurchased 3.9 million shares for $81.0 million in the first half of 2025.
• Authorized an additional $200 million for the share repurchase program in November 2025.
• Reduced gross interest expense in Q2 2025 by lowering the average outstanding debt balance.

This capital allocation strategy-using cash flow to buy back shares and actively manage their existing debt-is a strong vote of confidence from management in their long-term cash generation ability. You can dig deeper into who is buying and selling the stock by Exploring CoreCivic, Inc. (CXW) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if CoreCivic, Inc. (CXW) has the cash to cover its immediate bills and fund its growth, especially with all the new contract activity. The short answer is yes, CoreCivic's liquidity position is defintely solid, but the capital expenditure (CapEx) for new facility activations is eating up a lot of that operating cash flow.

The company's core liquidity metrics show a healthy buffer. The current ratio, which measures current assets against current liabilities, stands at a strong 1.60. Crucially, the quick ratio (acid-test ratio), which excludes inventory-a less liquid asset-is also 1.60. This means that for every dollar of short-term debt, CoreCivic has $1.60 in highly liquid assets to cover it. For a capital-intensive business like this, those ratios are excellent, showing a strong ability to meet near-term obligations without stress.

Working capital trends, however, tell a slightly more nuanced story. While the company has a structural net current asset deficit of around -$1.11 billion (Total Current Assets minus Total Current Liabilities), which is common for Real Estate Investment Trusts (REITs) like CoreCivic, the operational cash generation is positive. The change in working capital from operations was a positive $26.41 million in the most recent annual reporting period, which helps fund day-to-day operations. The business is generating cash efficiently from its core services. If you want to dive deeper into the business model that drives this cash flow, check out the Mission Statement, Vision, & Core Values of CoreCivic, Inc. (CXW).

Reviewing the cash flow statement overview for the trailing twelve months (TTM) through the most recent quarter in 2025 provides the clearest picture of capital deployment. Here's the quick math:

The Investing Cash Flow is a large negative number because CoreCivic is actively deploying capital to meet rising demand. For instance, they completed the acquisition of the Farmville Detention Center for $67 million in the third quarter of 2025. Plus, they plan to spend an estimated $70.0 million to $75.0 million in CapEx to reactivate previously idled facilities during 2025, which will pressure cash flow in the near term but drive future revenue.

On the financing side, the board authorized a substantial $200 million increase to the share repurchase program in November 2025, with a remaining authorization of $377.9 million. This signals management's confidence that the stock is undervalued, but it's an outflow of cash. The company's liquidity strengths are its operating cash flow and available credit. At the end of Q3 2025, CoreCivic held $56.6 million in cash and had $191.4 million available under its credit facility, giving it immediate access to nearly $250 million. The main liquidity concern is simply the high demand for capital to fund growth, which makes the Investing Cash Flow a major cash sink for the time being.

Valuation Analysis

You're looking at CoreCivic, Inc. (CXW) because the stock has been volatile, and you need a clear answer on whether the current price reflects fair value. The direct takeaway is that CoreCivic, Inc. appears significantly undervalued based on analyst consensus and core valuation multiples, despite a tough year for the stock price.

The market is currently pricing CoreCivic, Inc. at around $16.13 a share as of mid-November 2025, which is near its 52-week low of $15.95. This low price comes after the stock dropped approximately 25.36% throughout 2025. The good news is this price weakness has created a compelling disconnect between market price and fundamental value, according to Wall Street's expectations for the 2025 fiscal year.

Decoding the Core Multiples

To assess the value, we look at three key multiples-Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA). Here's the quick math using the latest available 2025 data and estimates. A lower multiple generally suggests a stock is cheaper relative to its earnings, assets, or cash flow.

• Forward P/E Ratio: 14.19. This is based on the company's 2025 estimated earnings. For a company with CoreCivic, Inc.'s growth profile, this multiple is low, especially compared to the broader market averages.
• Price-to-Book (P/B) Ratio: 1.23. This means the stock trades at only 1.23 times its book value (the company's assets minus its liabilities). A P/B ratio close to 1.0 often suggests the market is valuing the company near its liquidation value, which is defintely a bargain for a going concern.
• EV/EBITDA: 8.22. Enterprise Value-to-EBITDA (a measure of a company's total value relative to its operating cash flow) is relatively modest, indicating the company's debt load is manageable in the context of its cash-generating ability.

The Analyst Consensus vs. Market Price

The most telling sign of undervaluation comes from the analyst community. Despite the stock trading near its 52-week low, the consensus rating is a Moderate Buy. This strong recommendation is anchored by a significant price target. The average analyst price target for CoreCivic, Inc. is a massive $34.00.

Here's what that implies for your investment decision:

What this estimate hides is the political and regulatory risk inherent in this sector, which often suppresses the multiple regardless of the financials. Still, the sheer gap between the current price and the target suggests analysts see a clear path to value realization, possibly through contract stability or the company's ongoing share repurchase program, which was recently increased by $200 million.

Dividend Policy and Shareholder Return

A note on dividends: CoreCivic, Inc. currently pays an annual dividend of $0.00, resulting in a 0.00% dividend yield and a 0.00% payout ratio. The company suspended its dividend after converting from a Real Estate Investment Trust (REIT) structure. They are prioritizing debt reduction and share repurchases over cash payouts, which is a different, but still valid, way to return capital to shareholders when a stock is deeply undervalued. If you want to understand the strategic shift that led to this, you can review the Mission Statement, Vision, & Core Values of CoreCivic, Inc. (CXW).

Next step: Check if the company's $1.94 to $2.00 FY 2025 EPS guidance is achievable in Q4.

Risk Factors

You need a clear-eyed view of CoreCivic, Inc. (CXW), and the biggest challenge is simple: this is a business built on government contracts, which are inherently volatile. The company's financial health is tied directly to policy shifts, budget cycles, and political sentiment, which can change defintely faster than a commercial market.

The core risk is contract concentration and renewal. CoreCivic relies heavily on a few federal partners, primarily U.S. Immigration and Customs Enforcement (ICE). While demand from ICE has been robust-driving a 54.6% year-over-year increase in ICE revenue to $215.9 million in Q3 2025-a single adverse policy change or contract termination can instantly wipe out earnings. We saw this impact with the termination of the ICE contract at the South Texas Family Residential Center in late 2024, which had a significant negative impact on the 2025 guidance.

Operational and Financial Headwinds

Even with strong demand, CoreCivic faces near-term margin pressure. The company's revised full-year 2025 guidance, now projecting net income between $107.0 million and $113.0 million and diluted EPS between $0.99 and $1.05, reflects this challenge.

• Rising Operational Costs: Operating expenses increased to $398.3 million in Q2 2025, driven by wage hikes and additional staffing needed to meet the demand surge.
• Start-up Expenses: Reactivating idle facilities, while a long-term revenue driver, creates immediate costs. The company reported a combined start-up impact of $10 million-$11 million in 2025 from four facility activations.
• Capital Expenditure Needs: The real estate business requires constant upkeep. CoreCivic is projecting substantial maintenance capital expenditures for 2025: between $29.0 million and $31.0 million for real estate assets, plus another $31.0 million to $34.0 million for other assets and IT. That's a lot of cash going out the door.

Here's the quick math: the start-up costs alone are a direct hit to the bottom line, pushing the full benefit of new contracts, like the expected $320 million in annual revenue from four reactivated facilities, into 2026.

Mitigation Strategies and Diversification

To be fair, management is not sitting still. Their primary mitigation strategy is a two-pronged approach: diversification and operational flexibility. The company's structure across three segments-Safety (prisons/detention), Community (reentry centers), and Properties (real estate assets)-helps spread the risk.

The most concrete mitigation is in their cost structure. Management has highlighted using flexible cost structures and preemptive supply purchases to combat inflationary pressures and rising wages. They are also actively working to convert short-term agreements, like the six-month letter agreements for the Midwest Regional Reception Center and California City Immigration Processing Center, into more stable, long-term contracts.

What this estimate hides is the long-term political risk. Executive orders or new legislation aimed at reducing reliance on private facilities remain a constant external threat that no amount of operational efficiency can fully offset. This is the single largest external risk for CoreCivic. You can read more about the financial implications of these factors in the full analysis: Breaking Down CoreCivic, Inc. (CXW) Financial Health: Key Insights for Investors.

Next step: Review the company's Q4 2025 guidance when it's released to see if the start-up costs have stabilized and if the new contracts are fully ramping up revenue.

Growth Opportunities

You're looking for a clear path forward on CoreCivic, Inc. (CXW), and the short answer is that their near-term growth is tied directly to government demand and their ability to quickly activate idle assets. The company's strategy for 2025 and 2026 is less about new construction and more about maximizing the existing real estate footprint, which is a smart, capital-efficient move.

The core growth driver is the increased demand for detention services, especially from U.S. Immigration and Customs Enforcement (ICE). This demand is pushing up occupancy rates, which hit 76.8% across their Safety and Community segments in the second quarter of 2025, an increase from 74.3% a year prior. Higher occupancy means better operating margins, immediately translating to stronger earnings.

• Maximize idle assets.
• Acquire strategic, value-add properties.
• Return capital to shareholders.

Strategic Initiatives and Acquisitions

CoreCivic is executing a clear, two-pronged strategy: facility activation and strategic acquisition. On the acquisition front, they closed the purchase of the 736-bed Farmville Detention Center in July 2025 for $67 million, a deal that is expected to generate approximately $40 million in annual incremental revenue. That's a defintely solid return profile.

But the biggest near-term lever is reactivating their idle capacity. Since the second quarter of 2025, they have secured new contracts to activate four large, previously idle facilities, including the 2,560-bed California City Immigration Processing Center. In aggregate, these new contract awards are expected to generate approximately $320 million in annual revenue once they hit stabilized occupancy. This is how they turn a fixed cost base into a revenue engine.

2025 Financial Projections and Future Run-Rate

The financial guidance for the full 2025 fiscal year reflects the ramp-up costs associated with these new facility activations, which temporarily weigh on margins in the fourth quarter. Still, the underlying performance is strong.

Here's the quick math on their updated 2025 guidance, which was revised in November 2025:

What this estimate hides is the true scale of the revenue ramp-up. Management is guiding toward a strong 2026, projecting an annual run-rate revenue of approximately $2.5 billion and annual run-rate Adjusted EBITDA of over $450 million as these new contracts fully mature. This is a significant jump, driven by the fact that the potential annual revenue from reactivating all their idled beds could reach $500 million.

Competitive Advantages and Actionable Insights

CoreCivic's main competitive advantage isn't just their operational ability; it's their extensive real estate portfolio and their long-standing relationships with key government partners. They own the facilities, which gives them the flexibility to quickly meet the government's urgent needs, especially with the unprecedented increase in mandatory government funding for federal detention and border security. This is a high barrier to entry for any competitor.

The company is also focused on shareholder value, increasing its share repurchase program by $200 million in November 2025, raising the total authorization to $700 million. This signals management's belief that the stock is undervalued, especially when measured against the projected run-rate earnings for 2026. If you want a deeper dive into who is buying and why, you should read Exploring CoreCivic, Inc. (CXW) Investor Profile: Who's Buying and Why?

Your next step should be to model the 2026 run-rate projections, focusing on the margin expansion as the start-up costs from the 2025 facility activations roll off.