Overview

• U.S. modular accommodations provider's Q1 revenue slightly missed analyst expectations

• Net loss widened and adjusted EBITDA declined, reflecting higher expenses and contract transitions

• Company announced $750 mln multi-year contract for AI infrastructure community

Outlook

• Company sees 2026 revenue between $370 mln and $380 mln

• Target Hospitality expects 2026 adjusted EBITDA between $75 mln and $85 mln

• Company expects margin improvement in 2026 as new contracts ramp up

Result Drivers

• WHS CONTRACT GROWTH - Revenue growth driven by new Workforce Hospitality Solutions contract awards and ramp-up of Dilley, Texas contract

• HIGHER OPERATING EXPENSES - Profitability pressured by elevated costs tied to services, mobilization, and construction for WHS expansion

• GOVERNMENT CONTRACT LOSS - Loss of higher-margin Pecos Childrens Center contract reduced margins and segment profit

Company press release: ID:nPn2nML7Ca

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Revenue	Slight Miss*	$72.8 mln	$73.2 mln (4 Analysts)
Q1 Net Income		-$13 mln
Q1 Adjusted EBITDA		$9.9 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the hotels, motels & cruise lines peer group is "buy."

• Wall Street's median 12-month price target for Target Hospitality Corp is $16.50, about 7.6% above its May 8 closing price of $15.33

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