TH
Target Hospitality Corp.
$15.32
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 31.5% above fair value
You pay
$15.32
Bear
$9.04
Fair
$11.65
Bull
$14.13
Bear
$9.04
-41.0%
5% stage 1 growth, 12% discount
Fair
$11.65
-24.0%
9% stage 1 growth, 12% discount
Bull
$14.13
-7.8%
12% stage 1 growth, 12% discount
Adjust Assumptions
8.9%
12.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
34%
Implied Market Multiple
22.8x
Market is pricing in (growth)
12.6%
vs 8.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (7 analysts)
$25.20
Divergence from AlphaVal
54%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $11.65 per share.
Warnings
This company spends 21% of revenue on big investments like data centers and infrastructure, mostly for growth. We adjusted the cash flow figure to only subtract the upkeep costs, giving a clearer picture of true profitability.
Wall Street's average price target is $25.20 (from 7 analysts). Our estimate is 54% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions