TARGET HOSPITALITY CORP (TH) Stock Fundamental Analysis
NASDAQ:TH - Nasdaq - US87615L1070 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to TH. TH was compared to 133 industry peers in the Hotels, Restaurants & Leisure industry. Both the health and profitability get an excellent rating, making TH a very profitable company, without any liquidiy or solvency issues. TH has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
TH had positive earnings in the past year.
In the past year TH had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: TH reported negative net income in multiple years.
TH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TH has a Return On Assets of 7.90%. This is in the better half of the industry: TH outperforms 78.95% of its industry peers.
With a decent Return On Equity value of 10.70%, TH is doing good in the industry, outperforming 71.43% of the companies in the same industry.
TH has a better Return On Invested Capital (11.58%) than 76.69% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TH is significantly above the industry average of 13.81%.
The 3 year average ROIC (23.28%) for TH is well above the current ROIC(11.58%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.9% | ||
| ROE | 10.7% | ||
| ROIC | 11.58% |
ROA(3y)14.8%
ROA(5y)7.76%
ROE(3y)33.25%
ROE(5y)13.93%
ROIC(3y)23.28%
ROIC(5y)15.4%
1.3 Margins
With an excellent Profit Margin value of 12.71%, TH belongs to the best of the industry, outperforming 81.20% of the companies in the same industry.
In the last couple of years the Profit Margin of TH has grown nicely.
With an excellent Operating Margin value of 21.99%, TH belongs to the best of the industry, outperforming 84.96% of the companies in the same industry.
In the last couple of years the Operating Margin of TH has remained more or less at the same level.
With a Gross Margin value of 42.08%, TH is not doing good in the industry: 60.15% of the companies in the same industry are doing better.
TH's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 21.99% | ||
| PM (TTM) | 12.71% | ||
| GM | 42.08% |
OM growth 3Y30.12%
OM growth 5Y-0.65%
PM growth 3YN/A
PM growth 5Y37.62%
GM growth 3Y9.84%
GM growth 5Y0.15%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TH is creating value.
The number of shares outstanding for TH has been reduced compared to 1 year ago.
The number of shares outstanding for TH has been reduced compared to 5 years ago.
The debt/assets ratio for TH has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 4.89 indicates that TH is not in any danger for bankruptcy at the moment.
TH has a better Altman-Z score (4.89) than 87.97% of its industry peers.
The Debt to FCF ratio of TH is 0.68, which is an excellent value as it means it would take TH, only 0.68 years of fcf income to pay off all of its debts.
TH has a Debt to FCF ratio of 0.68. This is amongst the best in the industry. TH outperforms 90.23% of its industry peers.
TH has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
TH's Debt to Equity ratio of 0.10 is amongst the best of the industry. TH outperforms 81.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.68 | ||
| Altman-Z | 4.89 |
ROIC/WACC1.34
WACC8.66%
2.3 Liquidity
TH has a Current Ratio of 1.97. This is a normal value and indicates that TH is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.97, TH belongs to the top of the industry, outperforming 83.46% of the companies in the same industry.
TH has a Quick Ratio of 1.97. This is a normal value and indicates that TH is financially healthy and should not expect problems in meeting its short term obligations.
TH has a Quick ratio of 1.97. This is amongst the best in the industry. TH outperforms 84.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.97 |
3. Growth
3.1 Past
TH shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -66.18%.
The Earnings Per Share has been growing by 40.14% on average over the past years. This is a very strong growth
TH shows a very negative growth in Revenue. In the last year, the Revenue has decreased by -33.10%.
Measured over the past years, TH shows a small growth in Revenue. The Revenue has been growing by 3.76% on average per year.
EPS 1Y (TTM)-66.18%
EPS 3YN/A
EPS 5Y40.14%
EPS Q2Q%-120%
Revenue 1Y (TTM)-33.1%
Revenue growth 3Y9.86%
Revenue growth 5Y3.76%
Sales Q2Q%-34.47%
3.2 Future
Based on estimates for the next years, TH will show a very negative growth in Earnings Per Share. The EPS will decrease by -44.00% on average per year.
TH is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -11.46% yearly.
EPS Next Y-136.79%
EPS Next 2Y-44%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year-28.73%
Revenue Next 2Y-11.46%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 15.48, TH is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of TH indicates a rather cheap valuation: TH is cheaper than 80.45% of the companies listed in the same industry.
TH's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.15.
The Forward Price/Earnings Ratio is negative for TH. No positive earnings are expected for the next year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.48 | ||
| Fwd PE | N/A |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TH is valued cheaply inside the industry as 93.98% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TH is valued cheaper than 90.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.63 | ||
| EV/EBITDA | 4.86 |
4.3 Compensation for Growth
The decent profitability rating of TH may justify a higher PE ratio.
TH's earnings are expected to decrease with -44.00% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)0.39
EPS Next 2Y-44%
EPS Next 3YN/A
5. Dividend
5.1 Amount
TH does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
7.12
-0.05 (-0.7%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners30.49%
Inst Owner Change20.12%
Ins Owners2.5%
Ins Owner Change0.46%
Market Cap707.44M
Analysts80
Price Target8.93 (25.42%)
Short Float %7.22%
Short Ratio5.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.14%
Min EPS beat(2)-66.46%
Max EPS beat(2)74.75%
EPS beat(4)3
Avg EPS beat(4)17.65%
Min EPS beat(4)-66.46%
Max EPS beat(4)74.75%
EPS beat(8)6
Avg EPS beat(8)16.51%
EPS beat(12)7
Avg EPS beat(12)6.51%
EPS beat(16)9
Avg EPS beat(16)54.27%
Revenue beat(2)2
Avg Revenue beat(2)2.63%
Min Revenue beat(2)1.44%
Max Revenue beat(2)3.82%
Revenue beat(4)3
Avg Revenue beat(4)1.89%
Min Revenue beat(4)-2.83%
Max Revenue beat(4)5.14%
Revenue beat(8)7
Avg Revenue beat(8)2.01%
Revenue beat(12)9
Avg Revenue beat(12)1.65%
Revenue beat(16)12
Avg Revenue beat(16)2.22%
PT rev (1m)0%
PT rev (3m)16.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-366.67%
EPS NY rev (1m)0%
EPS NY rev (3m)-170.09%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-16.19%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)2.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.48 | ||
| Fwd PE | N/A | ||
| P/S | 2.02 | ||
| P/FCF | 10.63 | ||
| P/OCF | 6.74 | ||
| P/B | 1.7 | ||
| P/tB | 2.18 | ||
| EV/EBITDA | 4.86 |
EPS(TTM)0.46
EY6.46%
EPS(NY)-0.05
Fwd EYN/A
FCF(TTM)0.67
FCFY9.4%
OCF(TTM)1.06
OCFY14.85%
SpS3.52
BVpS4.18
TBVpS3.27
PEG (NY)N/A
PEG (5Y)0.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.9% | ||
| ROE | 10.7% | ||
| ROCE | 15.01% | ||
| ROIC | 11.58% | ||
| ROICexc | 12.41% | ||
| ROICexgc | 15.31% | ||
| OM | 21.99% | ||
| PM (TTM) | 12.71% | ||
| GM | 42.08% | ||
| FCFM | 19.04% |
ROA(3y)14.8%
ROA(5y)7.76%
ROE(3y)33.25%
ROE(5y)13.93%
ROIC(3y)23.28%
ROIC(5y)15.4%
ROICexc(3y)32.35%
ROICexc(5y)20.92%
ROICexgc(3y)44.23%
ROICexgc(5y)28.72%
ROCE(3y)30.2%
ROCE(5y)19.98%
ROICexcg growth 3Y59.31%
ROICexcg growth 5Y15.95%
ROICexc growth 3Y59.26%
ROICexc growth 5Y15.52%
OM growth 3Y30.12%
OM growth 5Y-0.65%
PM growth 3YN/A
PM growth 5Y37.62%
GM growth 3Y9.84%
GM growth 5Y0.15%
F-Score5
Asset Turnover0.62
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.1 | ||
| Debt/FCF | 0.68 | ||
| Debt/EBITDA | 0.29 | ||
| Cap/Depr | 53.62% | ||
| Cap/Sales | 11.01% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 70.65% | ||
| Profit Quality | 149.78% | ||
| Current Ratio | 1.97 | ||
| Quick Ratio | 1.97 | ||
| Altman-Z | 4.89 |
F-Score5
WACC8.66%
ROIC/WACC1.34
Cap/Depr(3y)108.53%
Cap/Depr(5y)79.14%
Cap/Sales(3y)15.74%
Cap/Sales(5y)13.03%
Profit Quality(3y)148.97%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-66.18%
EPS 3YN/A
EPS 5Y40.14%
EPS Q2Q%-120%
EPS Next Y-136.79%
EPS Next 2Y-44%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-33.1%
Revenue growth 3Y9.86%
Revenue growth 5Y3.76%
Sales Q2Q%-34.47%
Revenue Next Year-28.73%
Revenue Next 2Y-11.46%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-63.24%
EBIT growth 3Y42.95%
EBIT growth 5Y3.09%
EBIT Next Year-47.23%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-64.78%
FCF growth 3Y20.91%
FCF growth 5YN/A
OCF growth 1Y-70.05%
OCF growth 3Y13.19%
OCF growth 5Y20.18%