Target Hospitality's Favorable Government Contract Update Enhances Opportunity, Says Analyst


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


  • Oppenheimer analyst Scott Schneeberger reiterated an Outperform rating on the shares of Target Hospitality Corp (NASDAQ:TH) with a price target of $22.
  • 4Q22 total revenue exceeded expectations and increased 87% y/y. 4Q22 Government segment revenue exceeded the analyst's estimate and increased 145% y/y.
  • Pertaining to its West Texas Government contract, Target Hospitality announced an IDIQ contract posting on USASPENDING.gov associated with its non-profit partner consisting of a five-year term with an additional five-year option, said the analyst.
  • This is a near-final step in the government's contract award process, and bodes incrementally well for Target Hospitality to achieve a long-term contract extension in the analyst's view.
  • The analyst doesn't interpret a change to economic structure in the newly posted extension opportunity vs. the current one-year term expiring 5/15/23.
  • Upon this favorable update, the analyst is incrementally confident in Target Hospitality's FCF generation opportunity over a multi-year period.
  • Target maintained 2023 guidance for minimum revenue of $525 million and maximum revenue of $710 million.
  • Target delivered substantial 4Q22 revenue/adjusted EBITDA growth, primarily driven by its 7/6/22-announced extended/expanded West Texas government contract.
  • The recent Government contract extension/expansion of West Texas facility more than doubles the company's adjusted EBITDA estimates and favorably transforms it across its financial statements, noted the analyst.
  • Price Action: TH shares are trading higher by 0.48% at $16.74 on the last check Monday.
  • Photo Via Company

27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


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