Investors Shouldn't Overlook Target Hospitality's (NASDAQ:TH) Impressive Returns On Capital

Simply Wall St.10-15

If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Firstly, we'd want to identify a growing return on capital employed...

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Firstly, we'd want to identify a growing return on capital employed...</p>\n\n<a href=\"https://finance.yahoo.com/news/investors-shouldnt-overlook-target-hospitalitys-184716369.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"IE00BKPKM429.USD","symbol_name":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","start_time":0,"source_url":"https://finance.yahoo.com/news/investors-shouldnt-overlook-target-hospitalitys-184716369.html","article_id":"2475314590","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/CGL6VNgxo0F2rWKNpuY88A--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/cb90bae557d50c77576d28ff3b1c0eed"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2475314590","pubTimestamp":1728931636,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Firstly, we'd want to identify a growing return on capital employed  and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So when we looked at the ROCE trend of Target Hospitality  we really liked what we saw.For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Target Hospitality is:. Return on Capital Employed = Earnings Before Interest and Tax  ÷ . Therefore, Target Hospitality has an ROCE of 39%. That's a fantastic return and not only that, it outpaces the average of 10% earned by companies in a similar industry.Check out our latest analysis for Target Hospitality. On","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","QID":"纳指两倍做空ETF","SQQQ":"纳指三倍做空ETF","BK4211":"区域性银行","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","QLD":"纳指两倍做多ETF","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H",".IXIC":"NASDAQ Composite","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","TQQQ":"纳指三倍做多ETF","BK4588":"碎股","BK4142":"酒店、度假村与豪华游轮","PSQ":"纳指反向ETF","NDAQ":"纳斯达克OMX交易所","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","BK4112":"金融交易所和数据","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","THWWW":"Target Hospitality Equity Warrants Exp 15 March 2024","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","ISBC":"投资者银行","TH":"Target Hospitality Corp.","BK4585":"ETF&股票定投概念","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD"},"translate_title":"投资者不应忽视Target Hospitality（纳斯达克股票代码：TH）令人印象深刻的资本回报率","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"TH":1,"EBIT":1,"NDAQ":1,".IXIC":1,"ISBC":1,"THWWW":0.9,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. So when we looked at the ROCE trend of Target Hospitality (NASDAQ:TH) we really liked what we saw. \n Understanding Return On Capital Employed (ROCE) \n For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Target Hospitality is: \n Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) \n0.39 = US$179m ÷ (US$697m - US$236m) (Based on the trailing twelve months to June 2024).\n Therefore, Target Hospitality has an ROCE of 39%. That's a fantastic return and not only that, it outpaces the average of 10% earned by companies in a similar industry. \n Check out our latest analysis for Target Hospitality \n\n\n\n  NasdaqCM:TH Return on Capital Employed October 14th 2024\n \n\n In the above chart we have measured Target Hospitality's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Target Hospitality . \n The Trend Of ROCE \n Target Hospitality is showing promise given that its ROCE is trending up and to the right. The figures show that over the last five years, ROCE has grown 86% whilst employing roughly the same amount of capital. So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward. \n On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Essentially the business now has suppliers or short-term creditors funding about 34% of its operations, which isn't ideal. Keep an eye out for future increases because when the ratio of current liabilities to total assets gets particularly high, this can introduce some new risks for the business. \n In Conclusion... \n In summary, we're delighted to see that Target Hospitality has been able to increase efficiencies and earn higher rates of return on the same amount of capital. Considering the stock has delivered 33% to its stockholders over the last five years, it may be fair to think that investors aren't fully aware of the promising trends yet. So with that in mind, we think the stock deserves further research. \n On a separate note, we've found   1 warning sign for Target Hospitality   you'll probably want to know about. \n Target Hospitality is not the only stock earning high returns. If you'd like to see more, check out our free list of companies earning high returns on equity with solid fundamentals. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2475314590"}