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Investing.com - Guggenheim has reiterated its Buy rating and $13.00 price target on Xponential Fitness Inc (NYSE:XPOF) following the closure of the Securities and Exchange Commission’s investigation into the company. According to InvestingPro data, analysts’ targets for the stock range from $9 to $26, with the company currently appearing undervalued based on Fair Value analysis.
The fitness franchise operator’s stock jumped 25% in after-hours trading to $9.36, while the S&P 500 remained flat. Despite this rally, the current share price remains 40% below Guggenheim’s price target.
Guggenheim views the uneventful conclusion of the SEC investigation as a significant step in normalizing Xponential’s operations after a period of operational and financial uncertainty. The firm notes this development was "arguably, the least predictable" of several necessary steps toward recovery. InvestingPro subscribers can access 8 additional key insights about XPOF, including detailed analysis of its financial health, which is currently rated as FAIR.
The research firm maintains that its $13 price target could potentially be conservative, as it represents just 9.3 times the company’s estimated 2026 EBITDA and a sub-1.0 price-to-earnings growth ratio.
Guggenheim points out that applying a 15x multiple specifically to Xponential’s Club Pilates business could result in an equity value exceeding $1 billion, or approximately $22 per share, which would be more than double the current trading price.
In other recent news, Xponential Fitness announced the conclusion of an SEC investigation without any enforcement actions, a development that has removed a regulatory uncertainty for the company. The fitness franchisor also appointed Lily Yang to its Board of Directors, where she will serve as Chair of the Audit Committee, bringing extensive experience from her roles at Strava and Pinterest (NYSE:PINS). Additionally, Xponential Fitness held its annual stockholders meeting, where Mark Grabowski was elected as a Class I director and Deloitte & Touche LLP was ratified as the independent registered public accounting firm. Meanwhile, the company faces a leadership transition with the upcoming retirement of CEO Mark King due to health reasons, which has raised investor concerns. Stifel analysts maintained a Hold rating on the company, citing the need for tangible improvements in leadership stability and operational execution. Xponential Fitness has also reaffirmed its full-year guidance, focusing on enhancing franchisee support and addressing underperforming brands. As the company navigates these changes, the search for a new CEO and the future strategic direction will be closely watched by investors.
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