Is Target Hospitality Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Target Hospitality Corp. has moved from attractive to expensive, indicating a shift towards overvaluation. The company is currently considered overvalued based on its P/E ratio of 15, which is significantly lower than its peer Norwegian Cruise Line Holdings Ltd. at 14.40, but higher than Wyndham Hotels & Resorts, Inc. at 20.98. Additionally, the EV to EBITDA ratio stands at 4.83, which is more favorable compared to Wyndham's 10.36, yet less attractive than the industry average.
In terms of performance, Target Hospitality Corp. has shown a stark contrast in returns compared to the S&P 500, with a year-to-date decline of 27.57% against the index's gain of 13.30%. This underperformance, coupled with the company's high valuation ratios, suggests that it may not be a favorable investment at this time.