Contrasting Inspirato (NASDAQ:ISPO) and Target Hospitality (NASDAQ:TH)

Target Hospitality (NASDAQ:TH) and Inspirato (NASDAQ:ISPO) are both small-cap consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Risk and Volatility

Target Hospitality has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Inspirato has a beta of -0.03, meaning that its stock price is 103% less volatile than the S&P 500.

Profitability

This table compares Target Hospitality and Inspirato’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Target Hospitality	-11.58%	-8.65%	-6.41%
Inspirato	-4.24%	N/A	-4.10%

Valuation & Earnings

This table compares Target Hospitality and Inspirato”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Target Hospitality	$320.64 million	2.92	-$37.12 million	($0.38)	-24.71
Inspirato	$247.65 million	0.22	-$5.39 million	($0.87)	-4.90

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

Institutional and Insider Ownership

32.4% of Target Hospitality shares are owned by institutional investors. Comparatively, 39.5% of Inspirato shares are owned by institutional investors. 68.0% of Target Hospitality shares are owned by company insiders. Comparatively, 50.0% of Inspirato shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Target Hospitality and Inspirato, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Target Hospitality	1	0	2	1	2.75
Inspirato	1	0	0	0	1.00

Target Hospitality currently has a consensus price target of $11.00, suggesting a potential upside of 17.15%. Given Target Hospitality’s stronger consensus rating and higher possible upside, equities analysts plainly believe Target Hospitality is more favorable than Inspirato.

Summary

Target Hospitality beats Inspirato 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 Inspirato

Inspirato Incorporated, together with its subsidiaries, operates as a subscription-based luxury travel company. The company's portfolio includes luxury vacation homes, and accommodations at luxury hotels and resorts, as well as luxury safaris, cruises, custom-designed itineraries, and other experiences. It is involved in solving critical pain points for hospitality suppliers seeking to monetize their property with rental income. In addition, the company offers Inspirato Pass for member to book pass trips; Inspirato Club for members to book trips up to one year in advance Inspirato for Good, a platform designed to help nonprofit organizations accelerate funding results; Inspirato for Business, a business-to-business channel through which subscription and travel products are sold directly to businesses seeking to leverage luxury accommodations to recruit, retain, and reward their employees. The company was founded in 2010 and is headquartered in Denver, Colorado.