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Target Hospitality Corp.'s TH earnings and revenues are likely to decrease when the company reports fourth-quarter 2024 results.
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In the last reported quarter, earnings and revenues topped the Zacks Consensus Estimate by 66.7% and 8.3%, respectively. On a year-over-year basis, the bottom and top lines declined 53.5% and 34.8%, respectively.
Trend in Estimate Revision for TH
The Zacks Consensus Estimate for fourth-quarter earnings per share (EPS) is pegged at 7 cents, indicating a deterioration of 75.9% from 29 cents reported in the year-ago quarter.
For revenues, the consensus mark is pegged at $80.1 million. The projection suggests a 36.5% decline from the year-ago quarter’s reported figure.
Target Hospitality Corp. Price and EPS Surprise
Target Hospitality Corp. price-eps-surprise | Target Hospitality Corp. Quote
Let's take a look at how things have shaped up in the quarter.
Factors Likely to Shape TH’s Quarterly Results
Target Hospitality’s fourth-quarter operations are likely to have navigated through volatility arising from contract shifts and cost pressures.
TH’s government segment, a key revenue driver, may have faced short-term challenges due to contract adjustments. While TH expects the normal course renewal of its PCC community contract, fluctuations in occupancy-based variables could have created revenue headwinds in the fourth quarter.
A shift in contract mix could have pressured TH’s fourth-quarter margins. The government segment, known for its high revenue visibility and strong cash flow, has seen revenue declines due to non-cash, nonrecurring infrastructure revenue amortization. Additionally, lower minimum lease and variable services revenues at PCC may have impacted profitability.
The Zacks Consensus Estimate for fourth-quarter Government segment revenues is pegged at $43.3 million compared with $87.5 million reported in the prior-year quarter. Revenues from the HFS segment are pegged at $35.1 million compared with $36.2 million reported in the prior year quarter.
Rising operational costs may have weighed on TH’s bottom line in the fourth quarter. Moreover, investments in network optimization and service enhancements may have resulted in near-term margin compression. TH’s capital expenditures, focused on maintaining and enhancing its asset base, could have contributed to increased cash outflows in the to-be-reported quarter.
What Our Model Says About TH Stock
Our proven model does not conclusively predict an earnings beat for Target Hospitality this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.
Earnings ESP for TH: Target Hospitality has an Earnings ESP of -25.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Target Hospitality’s Zacks Rank: Currently, the company has a Zacks Rank #3.