Target Hospitality Corp (TH) soared in the recent trading session; here’s why

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Target Hospitality Corp. (TH) stock was rising 10.40% to trade at $3.45 in the current market at the last check. TH’s stock closed the previous session at $3.12. The TH stock volume remained 1.95 million shares, which was higher than the average daily volume of 1.26 million shares within the past 50 days. TH shares have risen by 82.75% over the last 12 months.

TH stock announces Full Year and Fourth Quarter 2020 financial report

TH stock had announced on 30th March 2021, its financial report for the Full year of 2020 and financial outlook for the year 2021.

Here are the following highlights of the year ended 2020:

  • Revenue for the year ended 31st December 2020 was $225.1 million which is lower compared to $321.1 million for the full year 2019.
  • The net loss for the year ended 31st December 2020 was $27.5 million which is higher compared to $6.2 million for the full year 2019.
  • The net cash generated for the year ended 31st December 2020 through operational activities total $46.8 million and Discretionary Cash Flow for the same period is $45.9 million.
  • The liquidity of the company was equal to $84.0 million as of December 31, 2020.
  • The borrowings of the company have been reduced under its revolving credit facility by utilizing the $32 million from the Discretionary Cash Flow (DCF)
  • Adjusted EBTIDA for the year ended 31st December 2020 was $78.5 million compared to $159.2 million for the full year 2019.

Highlights of the Fourth Quarter 2020

  • Revenue for Q4 2020 was $51.6 million compared to $76.1 million of Q4 2019.
  • Adjusted EBTIDA was $15.8 million Q4 2020, while $36 million for Q4 2019.
  • Q4 2020 experienced a net loss of $9.2 million compared to the net-income gain of $0.1 million for Q4 2019.
  • Average Daily Rate (ADR) for Q4 2020 was $69.92 which had decreased by $10.98 as compared to Q4 2019.
  • Overall utilization of TH’s services was 43% in Q4 2020 as compared to 76% in Q4 2019.

Financial outlook of TH stock for 2021

TH stock and company is expecting a modest return to normality of operational activities as the economy shows sign of improvements and vaccines roll out. Furthermore, the company had entered into a lease and services agreement with a national nonprofit organization on 29th March 2021, which is valued approximately at $118 million.

The Company announced its 2021 financial outlook by saying that it is expected the Total revenue to be between $235 and $245 million. DCF is expected to be $55 and $60 million. Total capital spending is expected between $12 million and $17 million.

Product offering by Target Hospital Corp

Target Hospitality is known as the largest provider of differentiated rental accommodations and value-added hospitality services in the United States. These specialty services are vertically integrated. Target Hospitality has a complex of housing communities that are customized, built, and owned by the company for the purpose of selling as a cost-effective solution for end-users. Furthermore, these housing complexes also have a variety of hospitality solution provisions which include culinary, concierge, laundry, recreational activities as well as security services.

TH stock’s clients primarily consist of public and energy sectors like investment grade oil and gas companies, government contractors, and energy infrastructure. Furthermore, it has a growing network of communities designed to maximize labor force, outcome, and satisfaction. The company operates and functions through three segments. These are the public sector as well as 26 communities in Bakken Basin and Permian Basin. The total rental accommodations it owns are 13,800 beds across 25 sites.

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