Target Hospitality (NASDAQ:TH) versus Xponential Fitness (NYSE:XPOF) Critical Analysis

Target Hospitality (NASDAQ:TH) and Xponential Fitness (NYSE:XPOF) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Insider & Institutional Ownership

32.4% of Target Hospitality shares are owned by institutional investors. Comparatively, 58.6% of Xponential Fitness shares are owned by institutional investors. 3.8% of Target Hospitality shares are owned by company insiders. Comparatively, 24.1% of Xponential Fitness shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Target Hospitality has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Xponential Fitness has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Target Hospitality and Xponential Fitness, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Target Hospitality	1	0	4	1	2.83
Xponential Fitness	1	10	1	0	2.00

Target Hospitality presently has a consensus price target of $25.20, indicating a potential upside of 77.64%. Xponential Fitness has a consensus price target of $6.50, indicating a potential upside of 28.08%. Given Target Hospitality’s stronger consensus rating and higher possible upside, equities analysts clearly believe Target Hospitality is more favorable than Xponential Fitness.

Earnings & Valuation

This table compares Target Hospitality and Xponential Fitness”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Target Hospitality	$320.64 million	4.41	-$37.12 million	($0.38)	-37.33
Xponential Fitness	$314.88 million	0.79	-$33.79 million	($1.47)	-3.45

Xponential Fitness has lower revenue, but higher earnings than Target Hospitality. Target Hospitality is trading at a lower price-to-earnings ratio than Xponential Fitness, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Target Hospitality and Xponential Fitness’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Target Hospitality	-10.85%	-9.80%	-6.65%
Xponential Fitness	-13.64%	-3.40%	-0.66%

Summary

Target Hospitality beats Xponential Fitness on 9 of the 15 factors compared between the two stocks.

About Target Hospitality

Target Hospitality Corp. operates as a specialty rental and hospitality services company in North America. The company operates through two segments, Hospitality & Facilities Services – South and Government. It owns a network of specialty rental accommodation units. In addition, the company provides catering and food, maintenance, housekeeping, grounds-keeping, security, health and recreation facilities, workforce community management, concierge, and laundry services. It serves the U.S. government contractors and investment grade natural resource development companies. Target Hospitality Corp. was founded in 1978 and is headquartered in The Woodlands, Texas.

About Xponential Fitness

Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America. It offers pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga services under the Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT brands. Xponential Fitness, Inc. was founded in 2017 and is headquartered in Irvine, California.