Target Hospitality (TH) AI Stock Analysis

• Market Cap: $881.55M
• Dividend Yield: N/A
• Average Volume (3M): 395.87K
• Price to Earnings (P/E): 82.7
• Beta (1Y): 0.16
• Revenue Growth: -35.28%
• EPS Growth: -90.34%
• Country: US
• Employees: 770
• Sector: Industrials
• Sector Strength: 76
• Industry: Specialty Business Services
• EPS (TTM): -0.12
• Shares Outstanding: 99,778,790
• 10 Day Avg. Volume: 559,098
• 30 Day Avg. Volume: 395,872
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 2.34
• Enterprise Value/Gross Profit: 7.58
• Enterprise Value/Ebitda: 6.95
• 1Y Price Target: $11.00
• Price Target Upside: 23.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 70 Outperform
• Price Target: $10.00 ▲(12.61% Upside)

Target Hospitality's overall stock score reflects strong technical momentum and positive earnings call sentiment, offset by high valuation concerns and financial performance challenges. The company's strategic growth initiatives and raised financial outlook are significant positives, but the high P/E ratio and declining revenue growth present risks.

Positive Factors

Growth Prospects

Target Hospitality raised 2025 revenue guidance to $310-320 million and increased expected adjusted EBITDA, reflecting strong growth prospects.

Revenue Performance

Target Hospitality delivered stronger-than-expected 2Q25 revenue of $61.6 million, outperforming estimates and consensus.

Stock Upgrade

Analyst recommends upgrading the shares of Target Hospitality to Buy with a target price increase to $11.00 from $7.50.

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.

EBITDA Impact

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

Stock Price Expectation

Analyst expects shares to trade materially lower on the contract cancellation.

Target Hospitality Business Overview & Revenue Model

Company Description

Target Hospitality (TH) is a leading provider of integrated hospitality solutions, primarily serving the energy, resource, and government sectors. The company specializes in providing temporary and permanent accommodations, catering, and facility management services to clients in remote locations. Through its extensive network of modular housing and hospitality facilities, Target Hospitality is dedicated to delivering high-quality living and working environments that enhance the well-being and productivity of its residents.

How the Company Makes Money

Target Hospitality generates revenue through several key streams. The primary source of income comes from leasing modular accommodations and providing hospitality services to clients in various sectors, particularly in oil and gas, mining, and government contracts. This is often structured as long-term contracts or agreements that ensure a steady cash flow. Additionally, the company earns revenue from ancillary services such as catering, facility management, and maintenance services that complement their accommodation offerings. Strategic partnerships with energy companies and government agencies further bolster their revenue, as these relationships often lead to multi-year contracts that provide financial stability and growth opportunities. Overall, Target Hospitality's diversified service offerings and strong client relationships contribute significantly to its earnings.

Target Hospitality Financial Statement Overview

Summary

Target Hospitality demonstrates a sound financial position with stable profitability and strong cash flow generation. Despite a decline in revenue and net profit margin, the company maintains a strong equity base and conservative leverage. Cash flow generation remains robust, supporting financial health.

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	310.38M	386.27M	563.61M	501.99M	291.34M	225.15M
Gross Profit	95.80M	178.18M	313.32M	247.13M	101.35M	57.16M
EBITDA	104.49M	125.10M	332.62M	224.29M	106.35M	68.11M
Net Income	11.10M	71.27M	173.70M	73.94M	-4.58M	-27.48M
Balance Sheet
Total Assets	533.71M	725.77M	694.35M	771.73M	513.39M	534.24M
Cash, Cash Equivalents and Short-Term Investments	19.24M	190.67M	103.93M	181.67M	23.41M	6.98M
Total Debt	24.00M	209.65M	200.83M	342.50M	330.21M	374.50M
Total Liabilities	132.53M	304.68M	317.05M	570.88M	416.12M	434.82M
Stockholders Equity	401.19M	421.08M	377.31M	200.85M	97.27M	99.42M
Cash Flow
Free Cash Flow	68.18M	121.43M	88.38M	185.32M	69.11M	34.60M
Operating Cash Flow	76.98M	151.68M	156.80M	305.61M	104.60M	46.78M
Investing Cash Flow	-37.62M	-28.84M	-68.18M	-140.23M	-35.91M	-10.95M
Financing Cash Flow	-174.42M	-36.06M	-166.37M	-7.10M	-52.27M	-35.68M

Target Hospitality Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.88
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 8.88 is above the 20-day moving average (MA) of 8.21, above the 50-day MA of 7.79, and above the 200-day MA of 7.83, indicating a bullish trend. The MACD of 0.34 indicates Negative momentum. The RSI at 66.08 is Neutral, neither overbought nor oversold. The STOCH value of 73.97 is Neutral, 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
TH	70 Outperform	$881.55M	82.72	2.78%	―	-35.28%	-90.34%
PRSU	69 Neutral	$1.04B	3.19	-44.30%	―	-49.92%	3773.09%
Sector *	64 Neutral	$10.95B	16.37	8.81%	1.96%	2.68%	-15.33%
CVEO	52 Neutral	$296.47M	19.41	-13.15%	4.22%	-10.60%	-201.64%

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.

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.