CoreCivic enters the back half of June with a striking divergence: the stock has surged 11% over the past week to $27.88, yet the options market is now the most call-heavy it has been in at least a year — raising the question of whether that enthusiasm has run ahead of the fundamentals.
The sharpest signal this week is in options. Call demand has overwhelmed puts to a degree not seen in the past 12 months. The put/call ratio dropped to 0.096 — the 52-week low — running more than two standard deviations below its 20-day average of 0.16. That is an unusually lopsided reading, suggesting traders have positioned aggressively for further upside rather than hedging into strength. The move lower in the PCR has been consistent and swift, falling from roughly 0.19 at the start of June to today's extreme.
Short interest tells a far calmer story. Bears have been retreating steadily: short interest as a percentage of free float has fallen 27% over the past month to just 2.3%. That is a low level by any standard, and the borrow market reflects it — availability is extraordinarily loose at over 5,000%, meaning there are more than fifty shares available to lend for every one currently borrowed. Borrowing costs, at 0.48% annualised, barely register. There is no short squeeze dynamic at work here; shorts have simply been closing positions into the rally rather than adding to them.
The Street is cautiously constructive but not unanimously so. The consensus sits at Buy, with a mean price target of $29.80 — roughly 7% above the current price. The most recent coverage note came from Benchmark in late March, initiating at Buy with a $28 target. That target is now below the market price, suggesting the stock has moved faster than analyst models anticipated. The bull case centres on CoreCivic's ICE and USMS contract pipeline and an active share repurchase programme. Bears point to the company's near-total dependence on government contracts and the political risk embedded in any administration shift away from private detention. On valuation, the forward P/E has expanded roughly 3.6 turns over the past month to 15.7x, reflecting the speed of the re-rating. EV/EBITDA is running near 8.6x. The EPS surprise factor score is strong at the 86th percentile — the company has a track record of beating estimates — while 12-month forward EPS growth ranks in just the 21st percentile, a reminder that execution is better than the growth profile suggests.
Institutional ownership provides an interesting backdrop. BlackRock holds the largest stake at 16.1% of shares outstanding, with a small net add of around 59,000 shares reported through end of May. Vanguard entities collectively account for another 11% or so. Cooper Creek Partners, a smaller active manager, cut its position by 3 million shares as of end-March — a notable reduction against the stock's eventual rally. Morgan Stanley added 799,000 shares over the same period. The insider picture is less compelling: the General Counsel has sold 12,500 shares each month since March in what appears to be a scheduled programme, most recently at $21 in early June — well below the current price. The net effect across the past 90 days is a small net positive of around 37,500 shares, which mostly reflects award grants rather than open-market conviction buys.
The closest peer, GEO Group, posted a 5.9% gain this week — solid, but meaningfully below CoreCivic's 11%. That partial catch-up trade is worth watching as the next earnings date approaches on August 5. The last quarterly print in May produced a single-day move of over 12%, though the prior release saw the stock slip nearly 4%. With the options market priced for further gains and shorts already light, the setup heading into Q2 results will depend heavily on whether occupancy rates and new contract momentum can justify the multiple expansion already in the price.
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