Oppenheimer analysts provided their views on Target Hospitality Corp. (NASDAQ:TH) following their meeting with the company’s CEO.
Formerly perceived as an energy stock, the analysts believe the company’s sizable June 7 US Government contract extension/expansion announcement has catapulted the stability of Target’s revenue/adjusted EBITDA.
Uniquely positioned to provide differentiated, top quality, humanitarian support via its remote accommodations/ services for unaccompanied immigrant minors near the Southern US border, the company’s anticipated adjusted EBITDA has more than doubled via the contract extension/expansion, with potential for further upside.
It has also enhanced the visibility of its financial profile as 75% of Target’s anticipated 2022 revenue has minimum revenue commitments (up from 57% in 2020) with 87% of the commitments backed by the US Government.
The analysts view the company as undervalued. They reiterated the outperform rating and $20 price target on the company’s shares.