Value
6.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 7.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 7.8 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 15.5x
- ▸PEG: 0.04
TH · Why this verdict
Why Target Hospitality (TH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Target Hospitality is growing fast (39% YoY) with 83% analyst upside, but it burns cash (FCF -13% of revenue), insiders sold $202M (14.96% of market cap), the top five customers are 63% of revenue and the stock is in capitulation-level weakness.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Insiders sold $202,024,842 of stock, equal to 14.960% of market cap, a very large exit signal against 2 purchases and 1 sale in the window. Insider breakdown | Insider selling should stop and net insider flow should turn neutral or positive over the next two quarters. | →Stable |
| CounterA large block sale can reflect a sponsor or holder rebalancing rather than a view on the business, and institutions are accumulating. | ||
The business is cash-burning, with FCF at -13% of revenue and quality at 1.9 versus a 4.0 floor, with losses per share in recent quarters. Quality breakdown | FCF should turn toward break-even and quarterly losses should narrow from -0.05 per share. | →Stable |
| CounterGrowth-phase spending can depress free cash flow temporarily, and the August 2026 loss was smaller than estimated. | ||
The top five customers make up 63.0% of revenue and operations are concentrated in the Permian Basin and Southwestern U.S., two high-severity risks. Bear case | Customer concentration should stay below 63% and revenue should grow toward the $120M next-quarter estimate. | →Stable |
| CounterLong contracts with a few large customers can make revenue predictable, but losing one would break the thesis. | ||
Growth is strong at 39% YoY, and analysts see 83% upside with a $21.92 target against a $13.79 price (59.0% below). Growth breakdown | Revenue growth should stay above 20% YoY and price should move toward the $21.92 target. | →Stable |
| CounterReported revenue differs materially between filings and a data provider, and analyst coverage is light, so growth and target figures may be unreliable. | ||
Momentum is very weak at 1.4/10, with RSI 13, falling on-balance volume and price below the 200-day average, although that average is still rising 11.8% over 30 days. Momentum breakdown | RSI should recover above 35 and the momentum score should rise above 4.5 within two quarters. | ↓Deteriorating |
| CounterShort interest of 12% and 87% implied volatility show the market is positioned for further declines, and heavy insider selling coincides with the drop. | ||
Insiders sold $202,024,842 of stock, equal to 14.960% of market cap, a very large exit signal against 2 purchases and 1 sale in the window.
→StableInsider breakdown
- Expectation
- Insider selling should stop and net insider flow should turn neutral or positive over the next two quarters.
CounterA large block sale can reflect a sponsor or holder rebalancing rather than a view on the business, and institutions are accumulating.
The business is cash-burning, with FCF at -13% of revenue and quality at 1.9 versus a 4.0 floor, with losses per share in recent quarters.
→StableQuality breakdown
- Expectation
- FCF should turn toward break-even and quarterly losses should narrow from -0.05 per share.
CounterGrowth-phase spending can depress free cash flow temporarily, and the August 2026 loss was smaller than estimated.
The top five customers make up 63.0% of revenue and operations are concentrated in the Permian Basin and Southwestern U.S., two high-severity risks.
→StableBear case
- Expectation
- Customer concentration should stay below 63% and revenue should grow toward the $120M next-quarter estimate.
CounterLong contracts with a few large customers can make revenue predictable, but losing one would break the thesis.
Growth is strong at 39% YoY, and analysts see 83% upside with a $21.92 target against a $13.79 price (59.0% below).
→StableGrowth breakdown
- Expectation
- Revenue growth should stay above 20% YoY and price should move toward the $21.92 target.
CounterReported revenue differs materially between filings and a data provider, and analyst coverage is light, so growth and target figures may be unreliable.
Momentum is very weak at 1.4/10, with RSI 13, falling on-balance volume and price below the 200-day average, although that average is still rising 11.8% over 30 days.
↓DeterioratingMomentum breakdown
- Expectation
- RSI should recover above 35 and the momentum score should rise above 4.5 within two quarters.
CounterShort interest of 12% and 87% implied volatility show the market is positioned for further declines, and heavy insider selling coincides with the drop.
Per-dimension breakdown
Quality
1.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 2.4 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 2.6 |
| FCF quality | 0.0 |
| Moat | 5.8 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -13% of revenue
- ▸Quality concerns
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 39% YoY
Momentum
1.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 1.7 |
- ▸Capitulation risk (RSI 19, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+11.1%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 9.9 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (5.0) — signal dampened
- ▸Analyst upside: 79%
Insider
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 6.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Heavy insider selling — $202,024,842 (14.621% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.7 |
| quality rank | 0.7 |
| growth rank | 8.4 |
- ▸Industry growth leader
Technical
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.1 |
| support resistance | 9.1 |
| 52w position | 3.0 |
| gap | 5.0 |
Risk (lower is worse)
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.9 |
| days to cover | 9.5 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 0.0 |
| beta | 5.0 |
| debt equity | 9.5 |
- ▸High IV: 91%
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Earnings in 6 days
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (4)
- ASYMMETRY:4.3>=1.5
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:1.6<4.5
- INSIDER:14.62%=EXTREME
- EARNINGS_PROXIMITY:6d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
4.28
Upside
+55.4%
Downside
12.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.49>1.3, MCap $1.4B<$5B
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 1.6<4.5 outcome against Growth at 10.0 and asymmetric R:R of 4.28.
The strongest dimensions are Growth at 10.0, Sentiment at 7.5, and Value at 6.9; the weakest are Momentum at 1.6, Quality at 1.9, and Peer rank at 4.7. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 4.28 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Heavy Insider Selling
Trip ifAdditional insider selling exceeds 5% of market cap over the next 90 days.
- P2Cash Burning Low Quality
Trip ifFCF stays below -10% of revenue for 2 consecutive quarters, from the current -13%.
- P3Customer Geographic Concentration
Trip ifTop-five customer share exceeds 70% of revenue, or any top customer cuts volumes by more than 25%.
- P4Strong Growth Analyst Upside
Trip ifYoY revenue growth falls below 15% from the current 39%.
- P5Capitulation Momentum
Trip ifPrice falls below the $13.07 stop-loss, with momentum score under 1.0 from the current 1.4.