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Target Hospitality Corp. TH is slated to report its first-quarter 2025 results on May 19, before market open.
In the last reported quarter, its adjusted earnings and revenues topped the Zacks Consensus Estimate by 100% and 4.5%, respectively. On a year-over-year basis, the bottom and top lines declined 58.6% and 33.7%, respectively.
Markedly, TH reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 51.5%.
Trend in Estimate Revision for TH
The Zacks Consensus Estimate for the first quarter has moved down to a loss per share of two cents from earnings per share (EPS) of two cents in the past 60 days. The estimated value indicates a deterioration of 110% from the EPS of 20 cents reported in the year-ago quarter.
Target Hospitality Corp. Price and EPS Surprise
Target Hospitality Corp. price-eps-surprise | Target Hospitality Corp. Quote
For revenues, the consensus mark is pegged at $65.4 million, indicating a decline of 38.7% from the year-ago quarter’s figure of $106.7 million. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Factors Likely to Shape Target Hospitality’s Q1 Results
The quarterly performance of the company is expected to have been hurt by reduced contributions from its Government and Hospitality & Facilities Services – South segments. The downtrend is likely to have been stimulated by lower Pecos Children’s Center (PCC) variable services revenues and no PCC Infrastructure Revenue Amortization.
The Zacks Consensus Estimate for the Government segment’s revenues is pegged at $23.7 million, which is significantly down from $67.6 million reported in the prior-year quarter. Revenues from the Hospitality & Facilities Services – South segment are pegged at $35.8 million, also down from $36.9 million reported in the prior-year quarter.
Moreover, the bottom line of the company is expected to have witnessed a downturn due to elevated selling, general and administrative expenses, accompanied by a detrimental impact from a declining top line. Although TH’s initiatives to improve its operational excellence are boding well, the ongoing macro risks, accompanied by an inflated cost structure, are expected to more than offset the prospects in the to-be-reported quarter.
The consensus mark for adjusted gross profit for the Government and the Hospitality & Facilities Services – South segments is pegged at $16.2 million and $11.5 million, indicating a year-over-year decline from $52.4 million and $12.8 million, respectively.
What the Zacks Model Unveils for TH Stock
Our proven model does not conclusively predict an earnings beat for Target Hospitality this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.
Earnings ESP: TH has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.