Target Hospitality (TH) AI Stock Analysis

• Market Cap: $795.91M
• Dividend Yield: N/A
• Average Volume (3M): 391.67K
• Price to Earnings (P/E): 18.3
• Beta (1Y): -0.01
• Revenue Growth: -33.11%
• EPS Growth: -68.55%
• Country: US
• Employees: 770
• Sector: Industrials
• Sector Strength: 91
• Industry: Specialty Business Services
• EPS (TTM): -0.07
• Shares Outstanding: 99,364,716
• 10 Day Avg. Volume: 323,887
• 30 Day Avg. Volume: 391,670
• PEG Ratio: -0.42
• Price to Book (P/B): 1.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.83
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 5.13
• Enterprise Value/Ebitda: 0.88
• 1Y Price Target: $7.50
• Price Target Upside: -6.37% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 74 Outperform
• Price Target: $9.00 ▲(12.36%Upside)

Target Hospitality's stock score reflects a strong financial foundation, positive earnings call sentiment, and a reasonable valuation. While technical indicators suggest some caution due to overbought conditions, the company's strategic growth initiatives and robust liquidity position are key strengths.

Positive Factors

Business Opportunities

There is potential for the assets to be redeployed with ICE to service needs at the border.

Financial Performance

Target Hospitality's 3Q24 total revenue of $95.2M and adjusted EBITDA of $49.7M exceeded expectations.

Negative Factors

Contract Termination

Target Hospitality received a notice from the U.S. government terminating the existing service agreement for the Pecos Children's Center.

Financial Impact

The Pecos Contract accounts for roughly 70-75% of the projected 2025 EBITDA forecast.

Target Hospitality Business Overview & Revenue Model

Company Description

Target Hospitality Corp. operates as a specialty rental and hospitality services company in North America. The company operates through four segments: Hospitality & Facilities Services - South, Hospitality & Facilities Services - Midwest, Government, and TCPL Keystone. It owns a network of specialty rental accommodation units with approximately 15,528 beds across 27 communities, which include 26 owned and 1 leased; and operates 1 community not owned or leased by the company. Target Hospitality Corp. also provides catering and food, maintenance, housekeeping, grounds-keeping, security, health and recreation, workforce community management, concierge, and laundry services. It serves the U.S. government, government contractors, investment grade natural resource development companies, and energy infrastructure companies. The company was founded in 1978 and is headquartered in The Woodlands, Texas.

How the Company Makes Money

Target Hospitality generates revenue through the provision of specialty rental accommodations and hospitality services. The company's primary revenue streams include long-term contracts with clients in the oil, gas, and mining industries, where it provides workforce lodging and associated services such as catering and facility management. Target Hospitality earns money by charging clients for the duration of the stay and the range of services provided. The company leverages strategic partnerships and relationships with major energy and resource companies to secure recurring business and maintain a steady revenue flow. TH's ability to offer integrated services and maintain high occupancy rates in its facilities further contributes to its financial performance.

Target Hospitality Financial Statement Overview

Summary

Overall financial performance is sound with stable profitability and strong cash flow generation. The income statement shows pressure on revenue and net margins, while the balance sheet demonstrates conservative leverage and a strong equity base. Cash flow remains robust, despite a decrease in free cash flow.

Income Statement

The income statement shows a mixed performance. The gross profit margin is strong with 40.9% in TTM, and the EBIT margin is healthy at 22.1%. However, the net profit margin has decreased to 12.7% from 18.5% the previous year, indicating some pressure on profitability. Revenue has declined by 9.5% compared to the previous year, suggesting challenges in maintaining growth momentum. Despite these concerns, the EBITDA margin remains robust at 43.8%.

Balance Sheet

The balance sheet is stable with a strong equity base, reflected in a high equity ratio of 73.8%. The debt-to-equity ratio is low at 0.13, indicating conservative leverage. However, total assets have decreased over the period, which might limit future growth opportunities. Return on Equity (ROE) is moderate at 10.7%, showing decent profitability relative to equity.

Cash Flow

Cash flow analysis shows solid performance. Free cash flow remains strong, although it decreased to $72.5 million from $121.4 million the previous year, resulting in a negative growth rate. Operating cash flow to net income ratio is high at 2.36, indicating efficient cash generation relative to net income. Free cash flow to net income ratio stands at 1.63, underscoring strong cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	349.50M	386.27M	563.61M	501.99M	291.34M	225.15M
Gross Profit	142.87M	178.18M	313.32M	247.13M	101.35M	57.16M
EBITDA	153.28M	125.10M	332.62M	224.29M	106.35M	68.11M
Net Income	44.42M	71.27M	173.70M	73.94M	-4.58M	-27.48M
Balance Sheet
Total Assets	562.52M	725.77M	694.35M	771.73M	513.39M	534.24M
Cash, Cash Equivalents and Short-Term Investments	34.47M	190.67M	103.93M	181.67M	23.41M	6.98M
Total Debt	54.76M	209.65M	200.83M	342.50M	330.21M	374.50M
Total Liabilities	147.25M	304.68M	317.05M	570.88M	416.12M	434.82M
Stockholders Equity	415.31M	421.08M	377.31M	200.85M	97.27M	99.42M
Cash Flow
Free Cash Flow	72.45M	121.43M	88.38M	185.32M	69.11M	34.60M
Operating Cash Flow	105.02M	151.68M	156.80M	305.61M	104.60M	46.78M
Investing Cash Flow	-37.13M	-28.84M	-68.18M	-140.23M	-35.91M	-10.95M
Financing Cash Flow	-157.71M	-36.06M	-166.37M	-7.10M	-52.27M	-35.68M

Target Hospitality Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TH, the sentiment is Positive. The current price of 8.01 is above the 20-day moving average (MA) of 7.30, above the 50-day MA of 7.20, and above the 200-day MA of 7.79, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 72.13 is Negative, neither overbought nor oversold. The STOCH value of 86.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TH.

Target Hospitality Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LXFR	76 Outperform	$334.19M	15.56	9.61%	4.24%	1.63%	7162.39%
TH	74 Outperform	$795.91M	18.26	11.23%	―	-33.11%	-68.55%
AMRC	71 Outperform	$944.76M	17.70	5.64%	―	30.13%	-7.60%
TRNS	70 Outperform	$806.82M	55.27	5.67%	―	7.30%	-1.89%
Sector *	61 Neutral	C$6.63B	7.56	3.42%	2.77%	6.63%	-23.02%
CVEO	60 Neutral	$323.95M	19.41	-8.41%	4.15%	-5.62%	-175.97%
RDW	54 Neutral	$2.37B	―	-451.56%	―	1.36%	-213.86%

Target Hospitality Corporate Events

Target Hospitality Releases Investor Presentation

On June 18, 2025, Target Hospitality Corp. released an investor presentation on its website, which includes forward-looking statements. The presentation is not considered filed under the Securities Exchange Act of 1934, nor incorporated by reference in any filing under the Securities Act of 1933, unless specifically referenced.

The most recent analyst rating on (TH) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Target Hospitality stock, see the TH Stock Forecast page.

Target Hospitality Holds 2025 Annual Stockholder Meeting

On May 22, 2025, Target Hospitality Corp. held its 2025 Annual Meeting of Stockholders where several key proposals were voted on. The stockholders elected directors, ratified the appointment of Ernst & Young LLP as the independent auditor, approved executive compensation, and amended the Incentive Plan to increase the number of shares authorized for issuance. Additionally, restricted stock units were awarded to non-employee directors.

The most recent analyst rating on (TH) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Target Hospitality stock, see the TH Stock Forecast page.

Target Hospitality Releases Investor Presentation

On May 6, 2025, Target Hospitality Corp. released an investor presentation on its website. The presentation includes forward-looking statements, which are subject to cautionary statements, and is not considered filed under the Securities Exchange Act of 1934.