Xponential Fitness (XPOF) AI Stock Analysis

141 Followers

Top Page

Xponential Fitness

(NYSE:XPOF)

50Neutral

Xponential Fitness has significant financial challenges, particularly in profitability and balance sheet strength, which are major risks. While technical analysis shows some short-term positives, long-term trends remain bearish. The valuation is unattractive due to negative earnings. Mixed guidance from the earnings call reflects both opportunities and challenges, with strong sales growth countered by revenue decline and increased costs.

Positive Factors

Membership and Studio Visits

The business saw another quarter of membership growth and increased studio visits with each growing 15% and 19%, respectively.

Sales Growth

North American system-wide sales grew 21% to $465M.

Negative Factors

Development Outlook

Disappointing development outlook as closures remain elevated, with anticipated gross openings lower than expected and closures higher than anticipated.

Financial Guidance

Revenue and EBITDA guidance for 2025 came in lower than expected, reflecting the company’s efforts to improve franchisee performance and address legacy issues.

Stock Performance

Shares are indicating down ~30% after hours which is indicative of the weaker guide.

Xponential Fitness (XPOF) vs. S&P 500 (SPY)

Market Cap

$445.37M

Dividend YieldN/A

Average Volume (3M)753.99K

Price to Earnings (P/E)―

Beta (1Y)1.56

Revenue Growth-3.17%

EPS Growth-194.72%

CountryUS

Employees288

SectorConsumer Cyclical

Sector Strength75

IndustryLeisure

Share Statistics

EPS (TTM)-0.20

Shares Outstanding34,926,000

10 Day Avg. Volume1,062,015

30 Day Avg. Volume753,991

Financial Highlights & Ratios

PEG Ratio0.05

Price to Book (P/B)-2.68

Price to Sales (P/S)0.00

P/FCF Ratio59.76

Enterprise Value/Market Cap1.70

Enterprise Value/Revenue0.58

Enterprise Value/Gross Profit3.13

Enterprise Value/Ebitda7.97

Forecast

1Y Price Target

$13.56

Price Target Upside47.71% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Xponential Fitness Business Overview & Revenue Model

Company DescriptionXponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in the United States and internationally. The company offers fitness and wellness services, including pilates, barre, cycling, stretching, rowing, yoga, boxing, dancing, running, and functional training under the Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT brands. As of December 31, 2021, it had 1,556 franchisees operating 1,954 open studios on an adjusted basis. The company was founded in 2017 and is headquartered in Irvine, California.

How the Company Makes MoneyXponential Fitness generates revenue primarily through its franchise model. The company earns franchise fees from studio owners who pay for the rights to operate under one of Xponential's brand names. Additionally, Xponential Fitness benefits from ongoing royalty payments based on a percentage of studio sales. Other revenue streams include the sale of branded fitness equipment and merchandise, as well as membership and class fees collected by franchisees. The company's strategic partnerships with vendors and suppliers also contribute to its earnings by providing cost efficiencies and expanding brand reach.

Xponential Fitness Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Analyzes income from different business areas, highlighting which segments drive growth and profitability, and where there might be opportunities or challenges.

Chart InsightsXponential Fitness faces challenges with declining equipment and merchandise revenue, reflecting a 20% and 25% year-over-year drop, respectively. This decline is impacting overall revenue despite strong franchise growth and North American sales. The earnings call highlights strategic shifts towards enhancing operational efficiency and international expansion, particularly in Asia. However, increased studio closures and legal costs pose risks. Investors should watch how these strategic initiatives balance against the revenue decline and operational challenges.

Data provided by:

Main Street Data

Xponential Fitness Financial Statement Overview

Summary

Xponential Fitness shows growth potential with increasing revenues but faces notable challenges in profitability and financial stability. The company has a healthy gross margin but negative net income and high leverage, indicating financial risks.

Income Statement

Neutral

Xponential Fitness has shown modest revenue growth over the years, with a slight increase from 2023 to 2024. However, the company is currently facing challenges with profitability, as indicated by the negative EBIT and net income in the most recent year. The gross profit margin remains healthy, reflecting effective cost management. Overall, the income statement reflects growth potential but also highlights significant profitability issues.

Balance Sheet

Negative

The balance sheet of Xponential Fitness reveals a concerning level of negative stockholders' equity, indicating financial instability. The high level of liabilities relative to assets and negative equity suggests high financial risk. While the debt-to-equity ratio is not calculable due to negative equity, the company's leverage is high. The company's asset base has slightly improved, but financial structure remains weak.

Cash Flow

Neutral

The cash flow statement shows a positive trend in operating cash flow, indicating some operational efficiency. However, there is a significant drop in free cash flow from 2023 to 2024, which could strain future liquidity. While the company generates positive operating cash flow, the free cash flow to net income ratio is affected by the negative net income, reflecting cash flow challenges amidst ongoing operational improvements.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
320.35M	318.66M	244.95M	155.08M	106.59M
	Gross Profit
260.87M	222.09M	162.00M	100.77M	65.37M
	EBIT
-53.61M	39.67M	15.14M	-3.04M	-2.85M
	EBITDA
-35.08M	67.98M	34.39M	-15.78M	6.88M
	Net Income Common Stockholders
-64.95M	-17.48M	2.88M	-51.44M	-13.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
32.74M	27.76M	37.37M	21.32M	11.30M
	Total Assets
403.40M	528.70M	482.69M	415.54M	322.84M
	Total Debt
379.62M	406.62M	166.66M	131.93M	182.77M
	Net Debt
362.95M	378.86M	129.29M	110.61M	171.47M
	Total Liabilities
597.40M	616.83M	690.75M	626.01M	318.09M
	Stockholders Equity
-99.76M	-10.59M	-154.78M	-654.43M	4.75M
Cash Flow		Free Cash Flow
6.96M	26.05M	35.54M	9.59M	-3.62M
	Operating Cash Flow
11.68M	35.42M	51.67M	14.45M	-728.00K
	Investing Cash Flow
-14.15M	-12.59M	-14.61M	-50.63M	-4.60M
	Financing Cash Flow
-1.88M	-23.11M	-21.01M	46.20M	7.29M

Xponential Fitness Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price9.18

Price Trends

50DMA

8.52

Positive

100DMA

11.94

Negative

200DMA

12.82

Negative

Market Momentum

MACD

0.17

Negative

RSI

55.28

Neutral

STOCH

71.36

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XPOF, the sentiment is Neutral. The current price of 9.18 is above the 20-day moving average (MA) of 8.37, above the 50-day MA of 8.52, and below the 200-day MA of 12.82, indicating a neutral trend. The MACD of 0.17 indicates Negative momentum. The RSI at 55.28 is Neutral, neither overbought nor oversold. The STOCH value of 71.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for XPOF.

Xponential Fitness Risk Analysis

Xponential Fitness disclosed 68 risk factors in its most recent earnings report. Xponential Fitness reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Xponential Fitness Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NATH	71 Outperform	$426.66M	18.01	-102.54%	1.92%	6.83%	24.77%
DIN	69 Neutral	$390.96M	6.93	-42.81%	8.15%	-0.33%	-35.74%
RICK	62 Neutral	$371.02M	51.25	2.62%	0.63%	-3.93%	-59.06%
Sector *	61 Neutral	$6.97B	11.38	2.88%	3.90%	2.64%	-22.07%
XPOF	50 Neutral	$445.37M	―	22.27%	―	-3.17%	-194.72%
FNKO	45 Neutral	$230.73M	―	-9.24%	―	-3.30%	85.53%

* Consumer Cyclical Sector Average

Performance Comparison

XPOF

Xponential Fitness

8.89

0.38

4.47%

DIN

Dine Brands Global

24.26

-15.71

-39.30%

NATH

Nathan's Famous

106.25

39.00

57.99%

RICK

RCI Hospitality Holdings

42.17

-5.44

-11.43%

FNKO

Funko

4.29

-4.10

-48.87%

CDRO

Codere Online

7.86

-0.13

-1.63%

Xponential Fitness Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 5.52%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

While there are notable achievements such as strong sales growth in North America and international expansion, the earnings call highlighted several challenges including a decline in revenue, increased studio closures, and significant legal costs. The sentiment is neutral as the positive aspects are balanced by the significant challenges faced.

Q1-2025 Updates

Positive Updates

Strong North American Sales Growth

North American system-wide sales increased by 18% year over year to $467 million, driven by a 4% same-store sales increase and growth from net new studio openings.

Expansion and New Appointments

The company appointed a new Chief Marketing Officer and Chief Human Resource Officer, and is launching a new field operations function with 12 field managers across North America.

International Expansion Success

Notable success in international markets such as Spain, Portugal, France, Japan, and Australia, with plans for a physical presence in Asia later this year.

Cash Position Improvement

Cash, cash equivalents, and restricted cash were $42.6 million as of March 31, 2025, up from $27.2 million as of the previous year.

Negative Updates

Revenue Decline

Consolidated revenue for the quarter was $76.9 million, down 4% from $79.7 million in the prior year period.

Increased Studio Closures

The company experienced 51 global studio closures in Q1, representing an annualized closure rate of 6%, with elevated closures in CycleBar and StretchLab.

License Sales Lagging

One-third of global licenses contractually obligated to open are lagging over twelve months behind schedule, prompting a campaign to address the issue.

Legal and Settlement Costs

Selling, general, and administrative expenses increased by 24% year over year, driven by a $15 million accrual for a potential settlement of a threatened franchise class action.

Lower Equipment and Merchandise Revenue

Equipment revenue declined by 20% and merchandise revenue decreased by 25% year over year.

Company Guidance

During the Q1 2025 earnings call, Xponential Fitness provided guidance on several key metrics and strategic initiatives. The company reported North American system-wide sales of $467 million, marking an 18% year-over-year increase, with average unit volumes rising by 8% to $659,000. Total membership increased by 12% to 865,000, while same-store sales grew by 4%. The company experienced a 4% decline in consolidated revenue to $76.9 million, largely due to lower equipment and merchandise sales, despite a 5% increase in franchise revenue. Adjusted EBITDA was $27.3 million, reflecting a 9% decline mainly due to accelerated marketing expenses. Looking ahead, Xponential projects North American system-wide sales to reach $1.935 billion to $1.955 billion, with adjusted EBITDA expected to grow by 5% to between $120 million and $125 million. The company anticipates a net new studio opening range of 60 to 80, a reduction from prior forecasts, while closures are expected to be 6% to 8% of the global system. Key strategic focuses include enhancing operational efficiency, strengthening franchisee support through new field operations, and driving international growth, particularly in markets such as Mexico, Portugal, Spain, and Japan.

Xponential Fitness Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Xponential Fitness CEO Mark King Announces Retirement

Neutral

May 15, 2025

On May 15, 2025, Xponential Fitness announced that its CEO, Mark King, plans to retire due to health reasons. King will remain in his role until a successor is appointed, ensuring a smooth transition. During his tenure, King focused on franchisee health, customer-centric culture, and strategic growth, contributing significantly to the company’s development. The Board of Directors is committed to a thorough search for a new CEO, with King’s continued support during the transition. The announcement highlights the company’s commitment to maintaining its leadership position in the health and wellness industry.

The most recent analyst rating on (XPOF) stock is a Hold with a $12.00 price target. To see the full list of analyst forecasts on Xponential Fitness stock, see the XPOF Stock Forecast page.

Spark’s Take on XPOF Stock

According to Spark, TipRanks’ AI Analyst, XPOF is a Neutral.

Xponential Fitness presents a mixed investment picture. While there are strengths in sales growth and strategic initiatives, significant financial challenges and valuation concerns weigh heavily. Technical indicators show potential short-term gains, but long-term sustainability depends on improved profitability and operational efficiency.

To see Spark’s full report on XPOF stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.