On Thursday, Northland initiated coverage on Xponential Fitness Inc (NYSE:XPOF) with a Market Perform rating and set a price target of $17.50. The research firm acknowledged the company's position as a leading franchisor in the boutique fitness, health, and wellness industry, which is valued at over $20 billion. With a market capitalization of $784 million and impressive gross profit margins of 67%, Xponential Fitness boasts a portfolio of eight distinct brands and operates 3,178 studios worldwide as of September 30, 2024. According to InvestingPro analysis, the company appears undervalued at current levels.
The coverage launch by Northland reflects a neutral stance on the company's stock, with the analysts expressing a recognition of Xponential Fitness's long-term growth potential. While the company is not currently profitable, InvestingPro data shows analysts expect profitability this year. The company is currently engaged in a comprehensive turnaround strategy, which is expected to take some time to fully implement and yield results. InvestingPro subscribers have access to 6 additional key insights about XPOF's financial health and growth prospects through the platform's comprehensive Pro Research Report.
Xponential Fitness's global presence and diverse brand portfolio position it as a significant player in the industry. The company's expansive network of studios underscores its extensive reach in the boutique fitness sector.
The analysts at Northland have set the price target for Xponential Fitness at $17.50, which serves as a benchmark for the stock's potential value. This target is informed by the firm's analysis of the company's market performance and future prospects.
Xponential Fitness's ongoing turnaround efforts are aimed at enhancing its business operations and financial performance. These efforts are multi-faceted and are designed to position the company for sustainable growth in the future. The analysts at Northland will continue to monitor the company's progress as it works through these strategic initiatives.
In other recent news, Xponential Fitness reported significant developments. The company's chairman, Mark Grabowski, sold over 2.5 million shares of the company's stock, maintaining a substantial stake of 24% in the fitness company. Xponential Fitness also welcomed Bruce Haase, a seasoned executive with extensive franchising experience, to its Board of Directors.
On the financial front, Xponential Fitness reported an 8% rise in North American average unit volume and a 21% increase in North American system-wide sales. However, the company also noted a widened net loss of $18 million, up from $5.2 million from the previous year. Consolidated revenue reached $80.5 million, and franchise revenue saw a notable increase of 22% to $44.5 million.
Looking forward, Xponential has revised its forecast for global new studio openings in 2024 to 490-510. The company projects system-wide sales to range between $1.705 billion and $1.715 billion, with total revenue expected to be between $310 million and $320 million. These recent developments underscore Xponential Fitness's commitment to its vision of becoming a leading franchisor in the health and wellness space.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.