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CoreCivic, Inc. (CXW) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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CoreCivic, Inc. (CXW)

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Intrinsic Value (DCF)

Current$19.91
→
Intrinsic$35.32
+77%
$21.52$35.32$61.53
Market implies 5% growth for 5 years
DCF analysis suggests CXW could have 77% upside at 16% growth — verify assumptions match your view.
At $20, the market prices in only 5% growth — below historical 16%, suggesting low expectations.
Range: Bear $22 → Bull $62. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →12%14%16%18%
8%$44$49$54$59
10%$29$32$35$39
12%$20$23$25$28
14%$15$17$19$21

Bull Case

  • Bull case ($62) offers 209% upside at 19% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (5%) ≤ historical CAGR (16%)

Bear Case

  • Bear case ($22) with 12% growth, 12% discount rate
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5-Year FFO Projection

Year 1$227.56M
Year 2$263.03M
Year 3$304.02M
Year 4$351.40M
Year 5$406.16M
Terminal$5.98B

📐 Model Inputs

Growth Rate15.6%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$196.88MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is CXW stock undervalued or overvalued?
🟢 UNDERVALUED

CXW trades at $19.91 vs. our DCF-derived intrinsic value of $35.32, implying +86% upside. At a 10.0% WACC and 15.6% projected FCF growth, the market appears to be underpricing the present value of CXW's future cash flows. The bear case ($21.39) still suggests upside, providing margin of safety.

What is CXW's intrinsic value?

Using a 5-year DCF model: Base FCF of $197M, projected at 15.6% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $905M net debt and dividing by 0.11B shares: Bear $21.39 | Base $35.32 | Bull $55.19. Current price $19.91 implies +86% to base case.

How is CXW's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 15.6% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($4.86B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 24.7x.