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Xponential Fitness (XPOF)
NYSE:XPOF
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Xponential Fitness
(NYSE:XPOF)
40Underperform
Positive Factors
Demand for Services
Management noted no signs of macro-related slowdown with total members and visits remaining healthy, indicating a strong demand for services.
Membership Growth
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
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.
Performance Challenges
StretchLab's performance is concerning, with AUVs declining and comp performance negative for 2024, contributing to elevated closures.
Studio Closures
Disappointing development outlook as closures remain elevated, with anticipated gross openings lower than expected and closures higher than anticipated.
Xponential Fitness (XPOF) vs. S&P 500 (SPY)
Market Cap
$373.62M
Dividend YieldN/A
Average Volume (3M)1.05M
Price to Earnings (P/E)―
Beta (1Y)1.47
Revenue Growth0.34%
EPS Growth-309.65%
CountryUS
Employees288
SectorConsumer Cyclical
Sector Strength64
IndustryLeisure
Share Statistics
EPS (TTM)-2.24
Shares Outstanding33,745,000
10 Day Avg. Volume583,418
30 Day Avg. Volume1,048,249
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.31
Price to Cash Flow (P/CF)137.80
P/FCF Ratio8.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.29Price Target Upside82.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Xponential Fitness Business Overview & Revenue Model
Company DescriptionXponential Fitness (XPOF) is a leading curator of boutique fitness brands across multiple verticals. The company operates a diverse portfolio of fitness studios offering a variety of specialized fitness experiences including Pilates, cycling, rowing, dance, yoga, running, and more. Xponential Fitness is known for its franchise model, empowering entrepreneurs to own and operate their studios under well-established brand names such as Club Pilates, Pure Barre, CycleBar, StretchLab, and others.
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 Financial Statement Overview
Summary
Xponential Fitness shows growth potential with increasing revenues but faces significant challenges with profitability, as reflected in negative EBIT and net income. The balance sheet reveals high leverage and negative equity, indicating financial risk. Operational cash flow is improving, yet high leverage remains a concern.Income Statement
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.45
Neutral
Balance Sheet
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.30
Negative
Cash Flow
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.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 326.72M | 320.35M | 318.66M | 244.95M | 155.08M | 106.59M | Gross Profit |
| 236.84M | 260.87M | 222.09M | 162.00M | 100.77M | 65.37M | EBIT |
| 35.26M | -53.61M | 39.67M | 15.14M | -3.04M | -2.85M | EBITDA |
| 22.78M | -35.08M | 67.98M | 34.39M | -15.78M | 6.88M | Net Income Common Stockholders |
| -34.68M | -67.66M | -17.48M | 2.88M | -51.44M | -13.64M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 9.34M | 32.74M | 27.76M | 37.37M | 21.32M | 11.30M | Total Assets |
| 0.00 | 403.40M | 528.70M | 482.69M | 415.54M | 322.84M | Total Debt |
| 0.00 | 5.40M | 406.62M | 166.66M | 131.93M | 182.77M | Net Debt |
| 9.34M | -27.34M | 378.86M | 129.29M | 110.61M | 171.47M | Total Liabilities |
| 0.00 | 597.40M | 616.83M | 690.75M | 626.01M | 318.09M | Stockholders Equity |
| 26.68M | -194.00M | -10.59M | -154.78M | -654.43M | 4.75M |
| Cash Flow | Free Cash Flow | ||||
| 2.94M | 6.96M | 26.05M | 35.54M | 9.59M | -3.62M | Operating Cash Flow |
| 8.55M | 11.68M | 35.42M | 51.67M | 14.45M | -728.00K | Investing Cash Flow |
| -17.93M | -14.15M | -12.59M | -14.61M | -50.63M | -4.60M | Financing Cash Flow |
| -4.32M | -1.88M | -23.11M | -21.01M | 46.20M | 7.29M |
Xponential Fitness Technical Analysis
Neutral
7.81
Price Trends
10.39
Negative
12.89
Negative
13.48
Negative
Market Momentum
-0.70
Negative
43.35
Neutral
74.06
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 7.81 is above the 20-day moving average (MA) of 7.58, below the 50-day MA of 10.39, and below the 200-day MA of 13.48, indicating a neutral trend. The MACD of -0.70 indicates Negative momentum. The RSI at 43.35 is Neutral, neither overbought nor oversold. The STOCH value of 74.06 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $392.76M | 16.54 | -102.54% | 2.09% | 6.83% | 24.77% | |
62 Neutral | $358.67M | 71.41 | 1.73% | 0.68% | -1.53% | -80.10% | |
60 Neutral | $6.85B | 11.57 | 3.09% | 4.18% | 2.37% | -21.38% | |
55 Neutral | $317.26M | 4.79 | -42.81% | 10.09% | -2.26% | -32.36% | |
46 Neutral | $234.50M | ― | -6.33% | ― | -4.22% | 90.89% | |
40 Underperform | $373.62M | ― | 22.27% | ― | 0.34% | -309.65% |
* Consumer Cyclical Sector Average
Performance Comparison
XPOF
Xponential Fitness
7.81
-5.00
-39.03%
DIN
Dine Brands Global
20.29
-21.90
-51.91%
NATH
Nathan's Famous
96.04
33.00
52.35%
RICK
RCI Hospitality Holdings
40.45
-9.83
-19.55%
FNKO
Funko
4.30
-1.90
-30.65%
Xponential Fitness Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: -35.56% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong sales growth and strategic initiatives aimed at improving operational efficiency and franchise development. However, the company faced significant challenges, including missing EBITDA and studio opening targets, financial restatements, and increased legal costs, which led to a cautious outlook for 2025.Highlights
Strong North America System-Wide Sales
North America system-wide sales of $465 million were up 21% year over year. Total members stood at 813,000 at quarter end, up 15% year over year.
Franchise Expansion Success
The company sold 400 franchise licenses and opened 464 gross new studios during 2024.
Adjusted EBITDA Growth
Adjusted EBITDA was $116.2 million for 2024, up 16% compared to the prior year period.
Strategic Initiatives
Xponential Fitness is focusing on building a senior management team, restructuring field operations, enhancing the franchise development process, and improving data and analytics capabilities.
Lowlights
EBITDA and Studio Opening Misses
Adjusted EBITDA missed by $5.8 million or 5%, and gross new studio openings missed the target by 36 studios.
Impairments and Financial Restatements
A $46 million impairment of goodwill and other assets was recorded. The company restated 2023 financial statements due to accounting errors.
Increased Legal and Restructuring Costs
SG&A was up 8% year over year, with $18.1 million in legal fees and other restructuring charges.
Higher Studio Closure Rate
There were 225 total studio closures in 2024, representing approximately 7% of global open studios, higher than the 3 to 5% previously communicated.
Company Guidance
During the Xponential Fitness, Inc. fourth quarter and full year 2024 earnings call, the company provided guidance for 2025, projecting North America system-wide sales to range from $1.935 billion to $1.955 billion, reflecting a 13% increase at the midpoint. They expect global net new studio openings to be between 200 and 220, representing a 12% decrease from the prior year. Total revenue is anticipated to be between $315 million and $325 million, with adjusted EBITDA expected to range from $120 million to $125 million, marking a 5% year-over-year increase. The company aims for an adjusted EBITDA margin of roughly 38% and plans for unlevered free cash flow conversion to be approximately 90% of adjusted EBITDA. Additionally, Xponential Fitness is focusing on strategic initiatives such as enhancing data-driven operations and international expansion, while managing operational challenges and emphasizing franchisee profitability.Xponential Fitness Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Xponential Fitness Appoints New Executives for Growth
Positive
Jan 17, 2025
On January 15, 2025, Xponential Fitness announced the appointment of four new executives, including John Kawaja as President – North America and Tim Weiderhoft as Chief Operating Officer – North America, effective January 13, 2025. These appointments are part of the company’s strategy to transform its culture and facilitate profitable growth, positioning Xponential Fitness as the global franchisor of choice in the health and wellness sector. The employment agreements for Kawaja and Weiderhoft include annual base salaries, cash bonus opportunities, and restricted stock units, with provisions for severance payments and other benefits upon termination.
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.