Stifel has kept a Buy recommendation and an $11.00 price objective for Target Hospitality (NASDAQ: TH) following the company’s announcement of a second expansion at its data center-oriented workforce housing community. At the time the analyst commentary was noted, shares were trading at $6.94, implying nearly 60% upside to the analyst’s price target. The stock has fallen roughly 27% over the prior six months.
The expansion adds a second 400-bed phase to a site that previously included a 250-bed initial phase and a first 400-bed addition. Once complete, the community’s capacity will total approximately 1,050 beds.
Management disclosed that the second 400-bed phase is expected to generate about $49 million in committed minimum revenue across an initial two-year term running from June 2026 through May 2028. With this agreement, total committed minimum revenue for the data center community increases to in excess of approximately $130 million, up from the original $43 million contract value tied to earlier phases.
Construction on the 400-bed expansion has already begun. Target Hospitality indicated capital expenditures for this phase should be in the range of $15 million to $18 million, and the project is targeted for completion in June 2026.
Stifel’s note reaffirmed the firm’s confidence in Target Hospitality’s capacity to serve rising demand in the data center segment and its view of the company as an underappreciated participant in the U.S. data center buildout. The analyst commentary framed the expansion and the resulting contracted revenue as supportive of that stance.
Additional balance-sheet context is provided by InvestingPro analysis, which finds that Target Hospitality holds more cash than debt, a position that the company can draw on to support ongoing expansions and related capital needs.
Beyond the data center community expansion, the company disclosed other notable commercial activity and corporate changes:
- Contract expansion and term options: The two-year committed revenue stream beginning June 2026 is reported to include options to extend the contract through May 2032.
- Power generation project contract: Target Hospitality secured a multi-year contract valued at roughly $35 million to provide workforce accommodations for a power generation project in Northern Nevada. That arrangement spans 25 months, begins in June 2026, and covers the construction and operation of housing for up to 250 workers, including culinary and community amenities.
- Leadership update: The company appointed Cyril J. Hahamski as Chief Accounting Officer, responsible for accounting functions and financial reporting. Jason Vlacich will remain in his role as Chief Financial Officer.
These developments together expand the company’s contracted revenue backlog tied to workforce accommodation services and reflect management actions to support execution and reporting as the business scales in these project areas.
For investors weighing the stock, the analyst view and the contractual details offer concrete data points: a sizeable committed revenue stream tied to the new 400-bed phase, modest planned capital expenditures for that phase, and an apparent liquidity position that, according to InvestingPro, features more cash than debt. At the same time, market pricing as of the noted trading level implied both a gap to the analyst target and a recent period of share price weakness.
As presented by company disclosures and the analyst commentary, the story centers on execution of these expansions, the conversion of contracted minimum revenue into realized cash flows, and how the company’s capital structure supports these project commitments.