Target Hospitality (NASDAQ:TH) Shares Gap Down - Should You Sell?

Key Points

• Target Hospitality shares fell sharply at the open, dropping from a prior close of $20.25 to $18.75 before recovering to about $19.37 on heavy volume.
• Analysts remain broadly optimistic, with a consensus rating of “Moderate Buy” and an average price target of $24.60; recent targets range from $22 to $27.
• The company beat quarterly expectations, reporting an adjusted loss of $0.09 per share versus an expected loss of $0.11 and revenue of $85.45 million versus $79.30 million expected, though it continues to post negative margins and return on equity.

Target Hospitality Corp. (NASDAQ:TH - Get Free Report) gapped down before the market opened on Wednesday . The stock had previously closed at $20.25, but opened at $18.75. Target Hospitality shares last traded at $19.37, with a volume of 4,181,984 shares trading hands.

Analyst Upgrades and Downgrades

TH has been the subject of several analyst reports. Morgan Stanley initiated coverage on Target Hospitality in a report on Monday, August 17th. They issued an "overweight" rating and a $22.00 price objective for the company. Weiss Ratings raised Target Hospitality from a "sell (d)" rating to a "sell (d+)" rating in a report on Friday, August 21st. Oppenheimer lifted their price target on Target Hospitality from $24.00 to $27.00 and gave the company an "outperform" rating in a research report on Tuesday. Stifel Nicolaus set a $26.00 price target on Target Hospitality in a report on Thursday, August 27th. Finally, Deutsche Bank Aktiengesellschaft restated a "buy" rating and issued a $23.00 price objective on shares of Target Hospitality in a research report on Thursday, August 27th. One research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating and one has given a Sell rating to the company. According to data from MarketBeat.com, Target Hospitality has a consensus rating of "Moderate Buy" and a consensus price target of $24.60.

Target Hospitality Stock Performance

The business's 50-day simple moving average is $17.23 and its two-hundred day simple moving average is $15.25. The company has a quick ratio of 0.65, a current ratio of 0.65 and a debt-to-equity ratio of 0.11. The firm has a market cap of $1.88 billion, a price-to-earnings ratio of -49.75 and a beta of 1.51.

Target Hospitality (NASDAQ:TH - Get Free Report) last posted its earnings results on Monday, August 10th. The company reported ($0.09) EPS for the quarter, beating analysts' consensus estimates of ($0.11) by $0.02. The firm had revenue of $85.45 million for the quarter, compared to analysts' expectations of $79.30 million. Target Hospitality had a negative return on equity of 9.80% and a negative net margin of 10.85%. As a group, sell-side analysts expect that Target Hospitality Corp. will post -0.08 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the business. BlackRock Inc. purchased a new stake in Target Hospitality in the 2nd quarter worth $64,312,000. Rubric Capital Management LP lifted its holdings in Target Hospitality by 9.5% during the second quarter. Rubric Capital Management LP now owns 2,189,456 shares of the company's stock valued at $15,589,000 after purchasing an additional 189,456 shares in the last quarter. Vanguard Group Inc. grew its position in shares of Target Hospitality by 43.0% in the third quarter. Vanguard Group Inc. now owns 1,994,641 shares of the company's stock valued at $16,915,000 after purchasing an additional 600,181 shares during the period. HighTower Advisors LLC grew its position in shares of Target Hospitality by 14.9% in the second quarter. HighTower Advisors LLC now owns 1,842,267 shares of the company's stock valued at $37,509,000 after purchasing an additional 238,280 shares during the period. Finally, Dimensional Fund Advisors LP increased its stake in shares of Target Hospitality by 21.4% during the first quarter. Dimensional Fund Advisors LP now owns 1,428,773 shares of the company's stock worth $13,259,000 after purchasing an additional 252,212 shares in the last quarter. Hedge funds and other institutional investors own 32.40% of the company's stock.

About Target Hospitality

Target Hospitality is a lodging solutions provider specializing in the ownership and operation of modular workforce housing communities across North America. The company serves large-scale clients in the energy, mining, construction and government sectors that require temporary or long-term accommodations for remote workforces. Its housing portfolio includes suite-style units, single-family cabins and “man-camp” dormitories, designed to match project size, duration and workforce composition.

In addition to lodging, Target Hospitality delivers integrated support services such as on-site dining and culinary management, housekeeping, maintenance, facility management and logistics planning.

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