Xponential Fitness Reports Strong Q4 Results, Raymond James Raises Price Target to $32

Xponential Fitness Inc (NYSE: XPOF), a leading franchisor of boutique fitness brands, has reported strong Q4 results that exceeded expectations, driven by robust studio and member growth. Raymond James analyst Joseph Altobello reiterated a Strong Buy rating on XPOF shares and raised the price target from $30 to $32.

Strong Q4 Results Exceed Expectations

For the quarter, Xponential Fitness reported adjusted EBITDA of $22.2 million, representing a 158% year-over-year growth, while revenues of $71.3 million increased 44% year-over-year. Franchise revenue grew 40% to $32.2 million, and equipment sales increased 64% to $11.5 million, driven by studio openings and increased foot traffic.

XPOF Opens 156 Net New Studios in Q4

During the quarter, XPOF opened 156 net new studios, bringing the full-year total to a record 511 and the total current studios worldwide to more than 2,600. At the same time, XPOF sold 257 licenses in the quarter, implying a 4-5 year pipeline totaling 5,450.

Management Provides Encouraging 2023 Guidance

Management also provided initial 2023 guidance, which Raymond James analyst Joseph Altobello described as encouraging. He believes there are meaningful growth opportunities for XPOF, driven by several factors, including rapid footprint expansion, a recovery in studio productivity from the COVID-related lows, and higher margins primarily through operating leverage.

Raymond James Raises Price Target to $32

Following the strong Q4 results, Raymond James analyst Joseph Altobello reiterated a Strong Buy rating on XPOF shares and raised the price target from $30 to $32. The increase in price target implies a valuation roughly in line with Planet Fitness Inc (NYSE: PLNT), despite XPOF’s diverse brand portfolio, ample long-term growth and margin expansion opportunities, and a high level of visibility given its studio pipeline.

XPOF Shares Trade Higher

On the last check Friday, XPOF shares were trading higher by 16.08% to $29.31. The strong Q4 results and positive guidance from management have been well-received by investors, leading to a significant increase in the stock price.

Xponential Fitness Inc (NYSE: XPOF) competes with several other companies in the fitness industry.

Some of its primary competitors include:

  1. Planet Fitness Inc (NYSE: PLNT): XPOF shares a valuation roughly in line with Planet Fitness, one of its major competitors. Planet Fitness operates over 2,000 fitness centers in the US and strongly focuses on low-cost gym memberships.
  2. Peloton Interactive Inc (NASDAQ: PTON): Peloton is a leading provider of connected fitness equipment and content focusing on at-home workouts. Peloton’s stock has been on the rise since the start of the COVID-19 pandemic as more people have turned to at-home activities.
  3. Equinox Group: Equinox Group is a luxury fitness brand that operates high-end gyms and offers personal training services. Equinox also owns SoulCycle, a popular cycling studio chain.
  4. Orangetheory Fitness: Orangetheory Fitness is a franchised fitness studio chain that offers high-intensity interval training workouts. Orangetheory has over 1,000 locations worldwide and has expanded rapidly in recent years.

The fitness industry is highly competitive, with many players vying for market share. However, Xponential Fitness has a diverse brand portfolio and a strong focus on franchising, which sets it apart from some of its competitors. Additionally, the company’s strong Q4 results and upbeat guidance suggest that it is well-positioned for continued growth in the coming years.

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