Shares of Target Hospitality Corp. (TH) plummeted 11.13% in pre-market trading on Monday following the release of its disappointing first-quarter 2025 financial results. The company, a leading provider of vertically-integrated modular accommodations and hospitality services, reported a wider-than-anticipated loss and a significant drop in revenue, causing investor concern.

For Q1 2025, Target Hospitality posted a net loss of $6.5 million, or $0.07 per share, missing the analyst consensus estimate of a $0.02 loss per share by a substantial margin. This represents a stark reversal from the $20.4 million net income, or $0.20 earnings per share, reported in the same period last year. The company's revenue also declined sharply to $69.9 million, a 34.47% decrease from $106.67 million in Q1 2024, although it did manage to beat the analyst estimate of $65.37 million.

The earnings report revealed a significant decline in the company's Government segment, with revenue dropping to $25.7 million from $67.6 million in the prior year. However, there was a bright spot in the Workforce Hospitality Solutions segment, which saw revenue increase to $8.1 million from $2.1 million, driven by activities related to the Workforce Hub Contract. Despite the disappointing quarterly results, Target Hospitality reiterated its full-year 2025 outlook, projecting total revenue between $265 million and $285 million, and adjusted EBITDA between $47 million and $57 million. The market's negative reaction suggests investors are concerned about the company's near-term performance and its ability to meet these projections given the weak start to the year.