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Target Hospitality
(NASDAQ:TH)
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Rating:63Neutral
Price Target:
$17.50
▲(8.70% Upside)
Action:Reiterated
Date:08/10/26
TH scores moderately due to strong TTM cash generation and a materially de-risked balance sheet, reinforced by an upbeat earnings call with raised 2026 guidance and strong contract visibility. Offsetting this are the current earnings reset (TTM losses), a neutral-to-soft technical backdrop, and limited valuation support given the negative P/E and no dividend yield provided.
Positive Factors
Strong Cash Generation
Robust TTM operating cash flow and free cash flow show the business converts operations into cash despite accounting losses. Durable cash generation funds mobilization, customer‑backed capex, and working capital needs, reducing reliance on dilutive financing over the medium term.
Negative Factors
Earnings Reset / Reported Losses
The swing from 2024 profits to TTM losses signals margin compression and operational stress. Persistent negative ROE (~-11%) and operating losses reduce return on invested capital, meaning sustained profit recovery is required to justify ongoing heavy capital deployment.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Cash Generation
Robust TTM operating cash flow and free cash flow show the business converts operations into cash despite accounting losses. Durable cash generation funds mobilization, customer‑backed capex, and working capital needs, reducing reliance on dilutive financing over the medium term.
Read all positive factors
Target Hospitality (TH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.66B
Dividend YieldN/A
Average Volume (3M)437.22K
Price to Earnings (P/E)―
Beta (1Y)0.84
Revenue Growth11.92%
EPS Growth-443.76%
CountryUS
Employees902
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)-0.38
Shares Outstanding99,623,420
10 Day Avg. Volume323,886
30 Day Avg. Volume437,218
Financial Highlights & Ratios
PEG Ratio0.14
Price to Book (P/B)2.05
Price to Sales (P/S)2.49
P/FCF Ratio113.02
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$23.25Price Target Upside44.41% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)-0.19
Revenue Forecast (FY)$375.86M
Target Hospitality Business Overview & Revenue Model
Company Description
Target Hospitality Corp. operates as a prominent provider of specialized temporary accommodations and comprehensive hospitality services throughout North America. The company oversees a significant network of lodging facilities, encompassing rough...
How the Company Makes Money
TH generates revenue primarily by operating lodging/hospitality facilities and charging customers for accommodations and bundled site services. Its revenue model centers on (1) lodging fees (often structured per occupied room/bed or per-person/per...
Target Hospitality Earnings Call Summary
Earnings Call Date:Aug 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call emphasized strong execution and rapid growth driven by the WHS segment: sizable contract awards (9,000+ beds, $1.4B+), a deep pipeline (20,000+ beds), significant sequential margin expansion (+700 bps), improved cash flows (> $110M YTD including > $100M customer advances), and materially enhanced liquidity ($660M credit facility). Challenges include elevated near-term capital spending (Q2 CapEx $132M; 2026 guide $490M–$510M) that will temporarily increase leverage, transitional costs of $5M–$7M related to Government asset optimization, moderation in HFS-South, and timing/ramp risks for large WHS contracts whose variable revenue accrues as communities scale (most upside realized in 2027). On balance, highlights materially outweigh lowlights as growth, contract visibility, margins, and financing flexibility provide a favorable outlook despite near-term investment and execution risks.Positive Updates
Strong Quarterly Revenue and EBITDA
Q2 total revenue of approximately $86 million and adjusted EBITDA of approximately $18 million, reflecting meaningful operating progress.
Negative Updates
Elevated CapEx and Mobilization Spend
Total capital spending of approximately $132 million in the quarter driven by mobilization and construction for large WHS developments; full-year 2026 CapEx guidance increased to $490M–$510M, which will temporarily raise net leverage as capital is deployed.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Quarterly Revenue and EBITDA
Q2 total revenue of approximately $86 million and adjusted EBITDA of approximately $18 million, reflecting meaningful operating progress.
Read all positive updates
Company Guidance
Target's 2026 guidance calls for total revenue of $410–420 million, adjusted EBITDA of $85–95 million and capital spending (ex‑acquisitions) of $490–510 million (largely front‑loaded in 2026 and supported by customer advance payments); management says 2026 operating cash flows will outpace adjusted EBITDA (YTD cash from operations >$110M including >$100M of advances) and the 2026 outlook assumes no variable revenue above contracted minimums. Looking to 2027, Target expects to exit with annualized revenue >$700 million and adjusted EBITDA >$260 million (the 2027 outlook includes ~ $30M of annual variable revenue tied to a data‑center hub), and to end 2027 with net leverage well below 3x. Recent quarter and balance‑sheet metrics supporting the outlook: Q2 revenue ≈ $86M, Q2 adjusted EBITDA ≈ $18M (≈21% margin), Q2 capex ≈ $132M, total available liquidity ≈ $141M, net leverage 0.6x, WHS Q2 revenue ≈ $36M (up 142% YoY) with average WHS utilized beds >4,000, HFS‑South ≈ $33M and Government ≈ $13M in Q2, >9,000 contracted beds since January representing >$1.4B of multiyear contracts, a commercial pipeline exceeding 20,000 beds, a new $660M credit facility (replacing a $175M revolver), recurring corporate expenses ~ $15M this quarter, and expected Government‑segment transitional costs of $5–7M over the next two quarters.Target Hospitality Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
63
Positive
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 347.37M | 320.63M | 386.27M | 563.61M | 501.99M | 291.34M |
| Gross Profit | 25.43M | 12.98M | 178.18M | 313.32M | 247.13M | 101.35M |
| EBITDA | 31.62M | 54.94M | 125.10M | 332.62M | 224.29M | 102.21M |
| Net Income | -37.68M | -37.12M | 71.27M | 173.70M | 73.94M | -4.58M |
Balance Sheet | ||||||
| Total Assets | 654.19M | 530.21M | 725.77M | 694.35M | 771.73M | 513.39M |
| Cash, Cash Equivalents and Short-Term Investments | 6.07M | 8.35M | 190.67M | 103.93M | 181.67M | 23.41M |
| Total Debt | 8.28M | 10.70M | 209.65M | 200.83M | 354.69M | 331.64M |
| Total Liabilities | 284.40M | 141.15M | 304.68M | 317.05M | 570.88M | 416.12M |
| Stockholders Equity | 370.11M | 389.26M | 421.08M | 377.31M | 200.85M | 97.27M |
Cash Flow | ||||||
| Free Cash Flow | 130.37M | 6.30M | 121.43M | 88.38M | 164.77M | 69.11M |
| Operating Cash Flow | 170.11M | 74.09M | 151.68M | 156.80M | 305.61M | 104.60M |
| Investing Cash Flow | -193.78M | -67.79M | -28.84M | -68.18M | -140.23M | -35.91M |
| Financing Cash Flow | 10.51M | -188.64M | -36.06M | -166.37M | -7.10M | -52.27M |
Target Hospitality Risk Analysis
Target Hospitality disclosed 11 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)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $5.06B | 43.81 | 5.32% | 0.49% | 1.41% | -22.01% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $1.66B | -42.70 | -11.10% | ― | 11.92% | -443.76% | |
62 Neutral | $15.90B | 41.34 | 11.23% | 0.81% | 11.02% | 6.21% | |
57 Neutral | $1.04B | 12.90 | 676.48% | ― | ― | ― | |
55 Neutral | $1.26B | 32.12 | 5.44% | ― | -26.32% | -87.41% | |
53 Neutral | $337.29M | -28.57 | -7.82% | ― | 8.01% | 51.71% |
* Industrials Sector Average
TH
Target Hospitality
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8.08
100.25%
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CVEO
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Target Hospitality Corporate Events
Business Operations and StrategyExecutive/Board Changes
Target Hospitality Adds Independent Directors to Board
Positive
Aug 5, 2026
On August 4, 2026, Target Hospitality Corp. appointed Margaret (Peggy) Smyth and Erich Sanchack as independent directors to its Board, with Smyth joining the Audit Committee and Sanchack the Compensation Committee. Both will serve until the compan...
Business Operations and StrategyPrivate Placements and Financing
Target Hospitality Expands Credit Facility, Boosts Liquidity
Positive
Jul 27, 2026
On July 24, 2026, Target Hospitality refinanced its debt structure as Arrow Bidco, an affiliate, entered into a new senior secured asset-based revolving credit facility of up to $660 million, backed by accounts receivable, rental equipment and qua...
Private Placements and FinancingRegulatory Filings and Compliance
Target Hospitality launches major secondary stock offering
Neutral
May 28, 2026
On May 28, 2026, Target Hospitality entered an underwriting agreement with Morgan Stanley Co. LLC and Deutsche Bank Securities Inc. for a secondary public offering of 7,000,000 shares of its common stock at $17.00 per share, sold by TDR Capital-c...
Business Operations and StrategyShareholder Meetings
Target Hospitality Shareholders Back Governance and Incentive Plans
Positive
May 21, 2026
On May 21, 2026, Target Hospitality held its 2026 Annual Meeting of Stockholders, where shareholders re-elected all nominated directors for terms expiring at the 2027 meeting and ratified the appointment of Ernst Young LLP as independent auditor ...
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.