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Are Investors Undervaluing Target Hospitality (TH) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Target Hospitality (TH - Free Report) is a stock many investors are watching right now. TH is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 15.85, while its industry has an average P/E of 16.92. Over the past 52 weeks, TH's Forward P/E has been as high as 17.79 and as low as 6.30, with a median of 12.83.

Investors should also recognize that TH has a P/B ratio of 3.03. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 3.36. Over the past year, TH's P/B has been as high as 6.80 and as low as 2.29, with a median of 3.30.

Finally, investors will want to recognize that TH has a P/CF ratio of 4.95. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 12.26. Within the past 12 months, TH's P/CF has been as high as 8.84 and as low as 3.40, with a median of 4.97.

Value investors will likely look at more than just these metrics, but the above data helps show that Target Hospitality is likely undervalued currently. And when considering the strength of its earnings outlook, TH sticks out at as one of the market's strongest value stocks.


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