Here's What to Know Ahead of Target Hospitality's Q1 Earnings

Target Hospitality Corp. TH is slated to report its first-quarter 2025 results on May 19, before market open.

In the last reported quarter, its adjusted earnings and revenues topped the Zacks Consensus Estimate by 100% and 4.5%, respectively. On a year-over-year basis, the bottom and top lines declined 58.6% and 33.7%, respectively.

Markedly, TH reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 51.5%.

Trend in Estimate Revision for TH

The Zacks Consensus Estimate for the first quarter has moved down to a loss per share of two cents from earnings per share (EPS) of two cents in the past 60 days. The estimated value indicates a deterioration of 110% from the EPS of 20 cents reported in the year-ago quarter.

Target Hospitality Corp. Price and EPS Surprise

Target Hospitality Corp. price-eps-surprise | Target Hospitality Corp. Quote

For revenues, the consensus mark is pegged at $65.4 million, indicating a decline of 38.7% from the year-ago quarter’s figure of $106.7 million. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Factors Likely to Shape Target Hospitality’s Q1 Results

The quarterly performance of the company is expected to have been hurt by reduced contributions from its Government and Hospitality & Facilities Services – South segments. The downtrend is likely to have been stimulated by lower Pecos Children’s Center (PCC) variable services revenues and no PCC Infrastructure Revenue Amortization.

The Zacks Consensus Estimate for the Government segment’s revenues is pegged at $23.7 million, which is significantly down from $67.6 million reported in the prior-year quarter. Revenues from the Hospitality & Facilities Services – South segment are pegged at $35.8 million, also down from $36.9 million reported in the prior-year quarter.

Moreover, the bottom line of the company is expected to have witnessed a downturn due to elevated selling, general and administrative expenses, accompanied by a detrimental impact from a declining top line. Although TH’s initiatives to improve its operational excellence are boding well, the ongoing macro risks, accompanied by an inflated cost structure, are expected to more than offset the prospects in the to-be-reported quarter.

The consensus mark for adjusted gross profit for the Government and the Hospitality & Facilities Services – South segments is pegged at $16.2 million and $11.5 million, indicating a year-over-year decline from $52.4 million and $12.8 million, respectively.

What the Zacks Model Unveils for TH Stock

Our proven model does not conclusively predict an earnings beat for Target Hospitality this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

Earnings ESP: TH has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Consumer Discretionary Releases

Norwegian Cruise Line Holdings Ltd. NCLH reported first-quarter 2025 results, with earnings and revenues missing the Zacks Consensus Estimate. Both the top and bottom lines decreased on a year-over-year basis.

Results in the quarter were hurt by a 2% decline in Capacity Days, stemming from a higher number of berths out of service due to larger ships undergoing dry-dock, as well as a strategic move to reduce passenger air participation rates. For 2025, Norwegian Cruise anticipates occupancy to be approximately 102.5% compared with the prior guidance of 103.4% and Capacity Days to be about 24.545 million.

MGM Resorts International MGM reported first-quarter 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top and the bottom lines declined from the prior-year quarter’s level.

Management remains optimistic about the outlook for the rest of 2025, supported by strong forward bookings and expectations of record hotel performance in April on the Las Vegas Strip. MGM Resorts stated progress on the $200 million EBITDA enhancement plan and expects more than $150 million to be realized in 2025.

Caesars Entertainment, Inc. CZR reported mixed first-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. Nonetheless, both the top and bottom lines improved on a year-over-year basis.

Caesars Entertainment’s first-quarter performance was driven by record results in the Digital segment. Growth in the regional segment, supported by recently opened properties and solid performance in Las Vegas, despite a tough comparison to last year’s Super Bowl period, also aided the quarter’s performance.

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This article originally published on Zacks Investment Research (zacks.com).

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