Monday, June 27, 2022
CoreCivic, Inc. (CXW)
Facility Sale Validates Asset Valuation; Buying Back Stock
CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
McRae Sale. In an 8-K filing on Friday, CoreCivic disclosed the Company has entered into an agreement with the Georgia Building Authority for the sale of the 1,978 bed McRae Correctional Facility for a purchase price of $130 million, or approximately $66,000 per bed. The McRae facility is currently under contract to the Bureau of Prisons until November 30th.
Validation. In our valuation section we have provided a per-bed valuation matrix to highlight what we believed to be the undervaluation of CoreCivic on an asset basis. The proposed sale of the McRae facility validates how undervalued these assets are, in our opinion. Applying the $65,723 per bed value to CoreCivic’s owned Safety and Properties Segments beds and subtracting out net cash results in a equity value per share in excess of $29, more than double the current trading price. And we are not including any value for the Community Segment….
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.