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Target Hospitality Corp (TH)
NASDAQ:TH
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Target Hospitality
(NASDAQ:TH)
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Rating:65Neutral
Price Target:
$8.00
▼(-6.65% Downside)
Target Hospitality's overall score reflects strong cash flow and strategic contract wins, which are offset by profitability challenges and valuation concerns. The earnings call provided a positive outlook with significant new contracts, but technical indicators suggest bearish momentum.
Positive Factors
New Multiyear Contracts
Securing multiyear contracts worth $400 million enhances revenue visibility and supports long-term growth, strengthening the company's market position.
Data Center Market Expansion
Expanding into data centers aligns with industry trends, offering significant growth potential and diversification beyond traditional sectors.
Raised Financial Outlook
An improved financial outlook reflects confidence in business prospects and strategic initiatives, indicating potential for enhanced profitability.
Negative Factors
Declining Revenue Growth
A significant decline in revenue growth suggests challenges in maintaining market momentum, potentially impacting future financial performance.
Termination of Key Contracts
Loss of key contracts in the government segment can reduce revenue streams and hinder growth, necessitating new client acquisition to offset losses.
Lower Margin Contributions
Anticipated lower margin contributions may pressure profitability, requiring efficiency improvements to sustain margins and shareholder returns.
Target Hospitality (TH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$855.11M
Dividend YieldN/A
Average Volume (3M)509.13K
Price to Earnings (P/E)―
Beta (1Y)0.37
Revenue Growth-26.65%
EPS Growth-110.98%
CountryUS
Employees770
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)-0.01
Shares Outstanding99,779,530
10 Day Avg. Volume471,745
30 Day Avg. Volume509,126
Financial Highlights & Ratios
PEG Ratio-0.24
Price to Book (P/B)2.30
Price to Sales (P/S)2.50
P/FCF Ratio7.97
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue2.64
Enterprise Value/Gross Profit10.00
Enterprise Value/Ebitda11.02
Forecast
1Y Price Target
$10.00Price Target Upside16.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)-0.27
Revenue Forecast (FY)$315.45M
Target Hospitality Business Overview & Revenue Model
Company DescriptionTarget 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 MoneyTarget Hospitality generates revenue primarily through the leasing of its modular lodging facilities and the provision of ancillary services to its clients. The company's key revenue streams include monthly rental fees charged for accommodations, as well as additional income from catering, facility management, and other hospitality services. Significant partnerships with major corporations in the energy and construction sectors help secure long-term contracts, providing a stable revenue base. Additionally, Target Hospitality benefits from economies of scale and operational efficiencies, allowing it to maintain competitive pricing while enhancing profitability.
Target Hospitality Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 18, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant contract wins and expansions in new markets, contributing to strong financial performance and reaffirmed outlook. However, challenges remain with revenue declines in the government segment and underutilized assets in West Texas, impacting margins.Q3-2025 Updates
Positive Updates
Significant Contract Wins
Target Hospitality added over $55 million in committed revenue contracts since last quarter, bringing the total value of new multiyear contract awards announced in 2025 to more than $455 million.
Expansion in AI and Data Center Markets
The company is capitalizing on the multitrillion dollar investment cycle in data center and AI infrastructure, with new contracts and the launch of the Target Hyper/Scale brand to support data center projects.
Government Segment Ramp-Up
The Dilley, Texas community is now fully operational, supporting up to 2,400 individuals, and is projected to generate approximately $30 million in revenue in 2025 and over $246 million over its expected 5-year term.
Strong Financial Position
Target Hospitality ended the quarter with $30 million in cash and zero net debt, resulting in total available liquidity of approximately $205 million.
Reaffirmed 2025 Outlook
The company reaffirmed its 2025 outlook, which includes total revenue of $310 million to $320 million and adjusted EBITDA of $50 million to $60 million.
Negative Updates
Decline in Government Segment Revenue
The government segment revenue declined compared to the previous year, mainly due to the termination of the PCC Contract, partially offset by the reactivation of the Dilley, Texas assets.
Underutilization of West Texas Assets
The company is actively remarketing its West Texas assets and incurring carrying costs of approximately $2 million to $3 million per quarter until a new contract is potentially awarded.
Impact of Construction Revenue on Margins
The increased scope of the Workforce Hub contract resulted in more construction activity, which will shift some previously forecasted services revenue into 2026 and slightly impact margins as construction revenue has a lower contribution profile.
Company Guidance
During Target Hospitality's Third Quarter 2025 earnings call, the company provided robust guidance and insights into its strategic growth initiatives. The company announced that it has secured over $455 million in new multiyear contract awards in 2025, with $55 million added since the second quarter. These contracts span various end markets, strengthening Target's business portfolio and expanding its reach. Target's ability to deliver customized solutions has opened growth opportunities in markets like data centers, AI infrastructure, power generation, and critical mineral development. The HFS segment boasts customer renewal rates over 90% and average relationships exceeding five years. The Dilley, Texas asset ramp-up was completed in September, contributing to future revenue, with an expected $30 million in revenue for 2025 and over $246 million over its five-year term. The company reaffirmed its 2025 outlook, expecting total revenues between $310 million and $320 million and adjusted EBITDA ranging from $50 million to $60 million. The call highlighted Target's strategic focus on expanding its contract portfolio, driven by strong demand and market fundamentals.Target Hospitality Financial Statement Overview
Summary
Target Hospitality shows resilience in cash flow generation and a strong balance sheet with low leverage. However, profitability challenges persist, as indicated by negative net income and declining margins. Recent revenue growth is a positive sign, but operational efficiency needs improvement.Income Statement
Target Hospitality's income statement shows a mixed performance. The TTM data reveals a gross profit margin of 21.79% and a net profit margin of -3.08%, indicating challenges in profitability. However, the company has shown a positive revenue growth rate of 1.34% in the TTM, recovering from a significant decline in the previous year. The EBIT and EBITDA margins have decreased compared to previous years, reflecting pressure on operational efficiency.65
Positive
Balance Sheet
The balance sheet indicates a strong equity position with a debt-to-equity ratio of 0.033 in the TTM, significantly improved from previous years. The return on equity is negative at -2.36% in the TTM, highlighting profitability challenges. However, the equity ratio remains stable, suggesting a solid asset base relative to equity.72
Positive
Cash Flow
Cash flow analysis shows robust free cash flow growth of 44.53% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 1.20, and the free cash flow to net income ratio is nearly 1, reflecting efficient cash conversion despite net income losses.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 314.55M | 386.27M | 563.61M | 501.99M | 291.34M | 225.15M |
| Gross Profit | 82.90M | 178.18M | 313.32M | 247.13M | 101.35M | 57.16M |
| EBITDA | 75.20M | 125.10M | 332.62M | 224.29M | 102.21M | 68.11M |
| Net Income | -9.69M | 71.27M | 173.70M | 73.94M | -4.58M | -25.13M |
Balance Sheet | ||||||
| Total Assets | 541.15M | 725.77M | 694.35M | 771.73M | 513.39M | 534.24M |
| Cash, Cash Equivalents and Short-Term Investments | 30.39M | 190.67M | 103.93M | 181.67M | 23.41M | 6.98M |
| Total Debt | 13.28M | 209.65M | 200.83M | 354.69M | 331.64M | 378.34M |
| Total Liabilities | 138.91M | 304.68M | 317.05M | 570.88M | 416.12M | 435.35M |
| Stockholders Equity | 402.38M | 421.08M | 377.31M | 200.85M | 97.27M | 98.89M |
Cash Flow | ||||||
| Free Cash Flow | 81.64M | 121.43M | 88.38M | 164.77M | 69.11M | 34.60M |
| Operating Cash Flow | 98.91M | 151.68M | 156.80M | 305.61M | 104.60M | 46.78M |
| Investing Cash Flow | -46.59M | -28.84M | -68.18M | -140.23M | -35.91M | -10.95M |
| Financing Cash Flow | -199.67M | -36.06M | -166.37M | -7.10M | -52.27M | -35.68M |
Target Hospitality Technical Analysis
Positive
8.57
Price Trends
7.40
Positive
7.91
Positive
7.37
Positive
Market Momentum
0.39
Negative
68.19
Neutral
85.14
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 8.57 is above the 20-day moving average (MA) of 7.62, above the 50-day MA of 7.40, and above the 200-day MA of 7.37, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 68.19 is Neutral, neither overbought nor oversold. The STOCH value of 85.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TH.
Target Hospitality Risk Analysis
Target Hospitality disclosed 40 risk factors in its most recent earnings report. Target Hospitality reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Target Hospitality Peers Comparison
UnderperformOutperform
Sector (63)
TH
Target Hospitality
8.57
-0.97
-10.17%
PRSU
Pursuit Attractions and Hospitality
35.86
-9.39
-20.75%
CVEO
Civeo
22.72
0.50
2.25%
Target Hospitality Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Target Hospitality Updates Bylaws Following Delaware Law Changes
Neutral
Nov 24, 2025
On November 21, 2025, Target Hospitality Corp.’s Board of Directors approved amendments to the company’s Bylaws. These changes involved removing a section related to transactions between the company and its directors or officers, aligning with recent amendments to Delaware’s corporate laws, and incorporating other clarifying changes.
Business Operations and Strategy
Target Hospitality Releases Investor Presentation
Neutral
Nov 17, 2025
On November 17, 2025, Target Hospitality Corp. released an investor presentation on its website. The presentation includes forward-looking statements, which are not considered filed under the Securities Exchange Act of 1934.
Other
Target Hospitality Releases New Investor Presentation
Neutral
Sep 16, 2025
On September 16, 2025, Target Hospitality Corp. released an investor presentation on its website. The presentation includes forward-looking statements, which are subject to cautionary statements and are not deemed ‘filed’ under the Securities Exchange Act of 1934.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.