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 appears overvalued based on its P/E ratio of 15, which is significantly lower than its peer average of approximately 64.15, and an EV to EBITDA ratio of 4.83, which also falls short compared to peers like Wyndham Hotels at 10.36. Additionally, the EV to Sales ratio stands at 2.13, further suggesting that the company is not favorably positioned relative to its competitors.
In comparison to its peers, Norwegian Cruise Line has a P/E of 14.40, while Hyatt Hotels shows a P/E of 15.27, both indicating more attractive valuations. Furthermore, Target Hospitality Corp. has underperformed against the S&P 500 across multiple time frames, with a year-to-date return of -27.57% compared to the S&P 500's 13.30%. This performance reinforces the notion that the stock is currently overvalued.