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On Thursday, Canaccord Genuity analysts maintained their Buy rating and $13.00 price target for Beachbody Company (NYSE:BODI), which according to InvestingPro data is currently trading below its Fair Value. The stock has shown strong momentum with a 31% gain over the past six months, as analysts anticipate the company’s forthcoming quarterly results will shed light on the impact of its recent business model transition. Beachbody, known for its fitness and nutrition products, shifted from a multi-level marketing (MLM) strategy to a single-level affiliate model in November.
The analysts expect that this strategic pivot will initially result in gross margin pressure due to the departure of MLM sellers, though the company currently maintains impressive gross profit margins of 67%. They also predict a significant reduction in selling-related expenses, as the new model eliminates the need for MLM payouts. This adjustment is part of Beachbody’s broader effort to streamline operations and reduce costs, particularly important given the company’s current financial health score of "FAIR" according to InvestingPro analysis.
In a September update, Beachbody’s management indicated that these changes could lower the company’s revenue threshold for achieving profitability. The break-even point could drop to approximately $225 million from the previous estimate of around $430 million. Canaccord’s analysts are projecting Beachbody’s revenues to be $411.5 million for fiscal year 2024 and $293.2 million for fiscal year 2025.
The analysts’ reiteration of the Buy rating suggests they have confidence in Beachbody’s strategic shift and its potential to improve the company’s financial performance. As the market anticipates the release of Beachbody’s quarterly results, investors will be looking for signs that the transition to the affiliate model is positioning the company for sustainable growth and profitability.
In other recent news, The Beachbody Company, Inc. has made several significant announcements. The company reported adjustments to its executive compensation, including an increase in the annual base salary of Executive Chairman Mark Goldston. Goldston’s salary will rise to $500,000 annually, with a further increase to $700,000 contingent upon the full repayment of the Blue Torch term loan. Additionally, Beachbody has amended the severance agreement for Interim Chief Financial Officer Brad Ramberg, enhancing his severance benefits and equity award vesting in recognition of his extended service and responsibilities.
In another development, Chief Operating Officer Kathy Vrabeck announced her retirement, effective April 1, 2025, marking a notable shift in the company’s leadership. No immediate successor has been named for Vrabeck, and the company has not disclosed the reasons for her retirement. These changes come as Beachbody continues to align its leadership compensation with company performance and strategic goals. Investors and market analysts will be observing these developments closely as Beachbody navigates its leadership transitions and financial objectives.
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