What Happened?
Shares of private prison operator CoreCivic (NYSE: CXW) jumped 6.5% in the afternoon session after the company reported strong fourth-quarter earnings that beat expectations and provided an optimistic forecast for 2026.
CoreCivic's adjusted earnings per share jumped to $0.27, a 69% surge from the $0.16 reported a year earlier. This performance was driven by a 49% year-over-year increase in federal revenue, which included a 103% rise in revenue from U.S. Immigration and Customs Enforcement (ICE). For the full year 2026, the company guided for diluted earnings per share of $1.49 to $1.59, implying roughly 40% growth at the midpoint. CoreCivic also expected its annual revenue run rate to reach approximately $2.5 billion by mid-2026, with its annual EBITDA run rate increasing by almost $100 million.
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What Is The Market Telling Us
CoreCivic’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 12.2% on the news that the company reported third-quarter results that missed profit expectations and lowered its full-year earnings guidance.
While revenue grew a strong 18.1% year-over-year to $580.4 million and beat Wall Street's expectations, this was overshadowed by weakness in profitability. The company's adjusted earnings of $0.24 per share fell short of analysts' estimates of $0.26. More significantly, management slashed its full-year outlook, cutting its adjusted EPS guidance to a midpoint of $1.03, a 6.8% decrease from prior projections. Full-year EBITDA guidance was also lowered, signaling to investors that near-term profitability pressures outweighed the strong quarterly sales growth.
CoreCivic is flat since the beginning of the year, and at $19.01 per share, it is trading 17.6% below its 52-week high of $23.06 from May 2025. Investors who bought $1,000 worth of CoreCivic’s shares 5 years ago would now be looking at an investment worth $2,494.
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