Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.2 |
| P/S | 9.5 |
| EV/EBITDA | 5.3 |
| Fwd P/E | 8.0 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 15.0x
- ▸PEG: 0.23
CXW · Why this verdict
Why CoreCivic (CXW) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Despite strong revenue growth of 26% year-over-year and three recent earnings beats, shares have moved above the near-term resistance ceiling with negative implied upside, an RSI at 91 signaling overbought conditions, free cash flow that is negative relative to net income, and 54% of revenue concentrated in federal authorities — the risk/reward geometry is clearly unfavorable at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Shares have moved above the near-term resistance target at $27.29, leaving the current price with a negative implied upside of roughly 1.7% and a risk/reward ratio of negative 0.24-to-1 — at these levels there is no margin of safety and more potential downside than upside in the setup. Price targets | If this constraint is resolved, the analyst consensus price target rises above $32.00, restoring more than 15% upside from current levels and putting the risk/reward geometry back in favor. | →Stable |
| CounterMomentum is strong — RSI at 91, rising on-balance volume, and above the 200-day moving average — and overbought conditions in a clearly trending stock can persist longer than expected, particularly when supported by genuine revenue growth of 26% year-over-year. | ||
Quality metrics sit just below the minimum standard at 3.9 out of 10 — driven by thin gross margins, limited competitive differentiation (no identified competitive moat), and negative free cash flow — leaving the business without the pricing power cushion to sustain margins under pressure. Warnings | If quality improves, the Piotroski F-Score reaches 8 out of 9 for 2 consecutive reporting periods alongside positive free cash flow, signaling a meaningful improvement in fundamental quality. | →Stable |
| CounterA Piotroski F-Score of 7 out of 9 indicates balance sheet and fundamental health measures are solid — the quality shortfall appears concentrated in margin structure rather than financial distress, and improving revenue growth could lift margin metrics over time. | ||
Revenue grew roughly 26% year-over-year — a standout pace that ranks as a growth leader within the peer group — but free cash flow is negative, standing at approximately negative 25% of net income, meaning the reported growth is not yet translating into actual cash for shareholders. Quality breakdown | If cash conversion improves, free cash flow turns positive for 2 consecutive quarters while revenue growth stays above 15% year-over-year. | →Stable |
| CounterRevenue growth of 26% year-over-year and the company's standing as an industry growth leader suggest the business is gaining market position at scale — the capital investment driving negative free cash flow may be the mechanism behind both the growth and the cash shortfall, and the conversion may improve as investment moderates. | ||
Approximately 54% of revenue is derived from federal correctional, detention, and residential reentry authorities — a single customer category that makes the entire business sensitive to shifts in federal policy, budget allocations, or contract renewal decisions. Bear case | If this concentration is reduced, non-federal revenue grows to represent more than 50% of total revenue in any annual filing. | →Stable |
| CounterThree of the last four quarters produced earnings beats with an average positive surprise of roughly 33%, suggesting that the federal customer base has been a reliable contributor to results rather than a source of disruption — the concentration has not visibly impaired financial performance in recent periods. | ||
With RSI at approximately 91, the stock is in technically overbought territory — a condition that, in the absence of a confirming catalyst of equal magnitude, frequently precedes a near-term mean-reversion pullback. Momentum breakdown | If the overbought condition proves durable rather than a reversal signal, the stock advances more than 15% above current levels (above approximately $31.94) within 3 months without a drawdown exceeding 10%. | →Stable |
| CounterStrong volume accumulation alongside an RSI at 91 can reflect genuine institutional buying pressure — stocks emerging from a period of underperformance and supported by real revenue growth can sustain overbought conditions for extended periods before any reversion occurs. | ||
Shares have moved above the near-term resistance target at $27.29, leaving the current price with a negative implied upside of roughly 1.7% and a risk/reward ratio of negative 0.24-to-1 — at these levels there is no margin of safety and more potential downside than upside in the setup.
→StablePrice targets
- Expectation
- If this constraint is resolved, the analyst consensus price target rises above $32.00, restoring more than 15% upside from current levels and putting the risk/reward geometry back in favor.
CounterMomentum is strong — RSI at 91, rising on-balance volume, and above the 200-day moving average — and overbought conditions in a clearly trending stock can persist longer than expected, particularly when supported by genuine revenue growth of 26% year-over-year.
Quality metrics sit just below the minimum standard at 3.9 out of 10 — driven by thin gross margins, limited competitive differentiation (no identified competitive moat), and negative free cash flow — leaving the business without the pricing power cushion to sustain margins under pressure.
→StableWarnings
- Expectation
- If quality improves, the Piotroski F-Score reaches 8 out of 9 for 2 consecutive reporting periods alongside positive free cash flow, signaling a meaningful improvement in fundamental quality.
CounterA Piotroski F-Score of 7 out of 9 indicates balance sheet and fundamental health measures are solid — the quality shortfall appears concentrated in margin structure rather than financial distress, and improving revenue growth could lift margin metrics over time.
Revenue grew roughly 26% year-over-year — a standout pace that ranks as a growth leader within the peer group — but free cash flow is negative, standing at approximately negative 25% of net income, meaning the reported growth is not yet translating into actual cash for shareholders.
→StableQuality breakdown
- Expectation
- If cash conversion improves, free cash flow turns positive for 2 consecutive quarters while revenue growth stays above 15% year-over-year.
CounterRevenue growth of 26% year-over-year and the company's standing as an industry growth leader suggest the business is gaining market position at scale — the capital investment driving negative free cash flow may be the mechanism behind both the growth and the cash shortfall, and the conversion may improve as investment moderates.
Approximately 54% of revenue is derived from federal correctional, detention, and residential reentry authorities — a single customer category that makes the entire business sensitive to shifts in federal policy, budget allocations, or contract renewal decisions.
→StableBear case
- Expectation
- If this concentration is reduced, non-federal revenue grows to represent more than 50% of total revenue in any annual filing.
CounterThree of the last four quarters produced earnings beats with an average positive surprise of roughly 33%, suggesting that the federal customer base has been a reliable contributor to results rather than a source of disruption — the concentration has not visibly impaired financial performance in recent periods.
With RSI at approximately 91, the stock is in technically overbought territory — a condition that, in the absence of a confirming catalyst of equal magnitude, frequently precedes a near-term mean-reversion pullback.
→StableMomentum breakdown
- Expectation
- If the overbought condition proves durable rather than a reversal signal, the stock advances more than 15% above current levels (above approximately $31.94) within 3 months without a drawdown exceeding 10%.
CounterStrong volume accumulation alongside an RSI at 91 can reflect genuine institutional buying pressure — stocks emerging from a period of underperformance and supported by real revenue growth can sustain overbought conditions for extended periods before any reversion occurs.
Per-dimension breakdown
Quality
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.0 |
| ROA | 3.2 |
| Gross margin | 0.7 |
| Op margin | 4.6 |
| Net margin | 2.8 |
| Current ratio | 8.3 |
| FCF quality | 0.0 |
| Moat | 4.9 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -25% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
9.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.9 |
| EPS growth | 10.0 |
- ▸Strong growth: 26% YoY
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 98)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 5.1 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (5.0) — signal dampened
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Modest insider selling — $757,250 (0.026% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 0.6 |
| growth rank | 8.8 |
- ▸Industry growth leader
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 1.1 |
| 52w position | 9.3 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.6 |
| days to cover | 8.8 |
| volatility | 2.6 |
| put call | 10.0 |
| implied vol | 0.8 |
| beta | 9.2 |
| debt equity | 5.0 |
- ▸High IV: 75%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.84
Upside
-12.6%
Downside
15.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $2.9B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 9.4 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.8=NEGATIVE.
The strongest dimensions are Growth at 9.4, Value at 6.9, and Catalyst at 6.7; the weakest are Insider at 3.9, Quality at 3.9, and Technical at 4.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.84 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Shares have moved above the near-term resistance target at $27.29, leaving the current price with a negative implied upside of roughly 1.7% and a risk/reward ratio of negative 0.24-to-1 — at these levels there is no margin of safety and more potential downside than upside in the setup.
Trip ifAnalyst consensus price target rises above $32.00, restoring more than 15% upside from current price.
- P2Revenue grew roughly 26% year-over-year — a standout pace that ranks as a growth leader within the peer group — but free cash flow is negative, standing at approximately negative 25% of net income, meaning the reported growth is not yet translating into actual cash for shareholders.
Trip ifFree cash flow turns positive for 2 consecutive quarters while revenue growth stays above 15% year-over-year.
- P3Approximately 54% of revenue is derived from federal correctional, detention, and residential reentry authorities — a single customer category that makes the entire business sensitive to shifts in federal policy, budget allocations, or contract renewal decisions.
Trip ifNon-federal revenue exceeds 50% of total revenue in any annual filing.
- P4With RSI at approximately 91, the stock is in technically overbought territory — a condition that, in the absence of a confirming catalyst of equal magnitude, frequently precedes a near-term mean-reversion pullback.
Trip ifStock price advances more than 15% above current $27.77 (above $31.94) within 3 months without a drawdown exceeding 10%.
- P5Quality metrics sit just below the minimum standard at 3.9 out of 10 — driven by thin gross margins, limited competitive differentiation (no identified competitive moat), and negative free cash flow — leaving the business without the pricing power cushion to sustain margins under pressure.
Trip ifPiotroski F-Score reaches 8 out of 9 for 2 consecutive reporting periods.