CoreCivic's (NYSE:CXW) earnings have declined over five years, contributing to shareholders 35% loss

It is doubtless a positive to see that the CoreCivic, Inc. (NYSE:CXW) share price has gained some 33% in the last three months. But if you look at the last five years the returns have not been good. After all, the share price is down 47% in that time, significantly under-performing the market.

Although the past week has been more reassuring for shareholders, they're still in the red over the last five years, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for CoreCivic

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

CoreCivic became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.

In contrast to the share price, revenue has actually increased by 0.9% a year in the five year period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth

We know that CoreCivic has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think CoreCivic will earn in the future (free profit forecasts).

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between CoreCivic's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for CoreCivic shareholders, and that cash payout explains why its total shareholder loss of 35%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

It's nice to see that CoreCivic shareholders have received a total shareholder return of 15% over the last year. Notably the five-year annualised TSR loss of 6% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 4 warning signs for CoreCivic (2 shouldn't be ignored) that you should be aware of.

But note: CoreCivic may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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