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On Friday, Jefferies analyst Randal Konik adjusted the price target for Xponential Fitness Inc (NYSE:XPOF) shares, reducing it to $26 from the previous $32. Despite the decrease, the firm maintained its Buy rating on the company’s stock. According to InvestingPro data, the stock currently trades at $8.70, significantly below the analyst consensus range of $9-32, suggesting potential upside despite recent volatility. This adjustment came after Xponential Fitness reported its first-quarter results, which Konik notes demonstrated a normalization in growth with core metrics remaining stable. The company saw same-store sales (SSS) increase by 4%, membership numbers continue to rise by double digits, and average unit volume (AUV) grow at a high single-digit percentage. InvestingPro analysis reveals impressive gross profit margins of 66.26%, though the company faces challenges with short-term obligations exceeding liquid assets.
Xponential Fitness’ stock traded lower in after-hours trading, a reaction that Konik attributes to the market’s focus on the anticipated softer unit growth for the year. However, he believes that while unit growth is returning to normal levels, it is still on an upward trajectory. Konik expressed confidence in the company’s CEO, Anthony Geisler, for his prudent guidance towards long-term profitable growth.
Konik’s commentary highlighted the company’s resilience, noting, "1Q results showed normalizing growth, while core metrics hold steady." He pointed out the positive performance indicators such as the 4% growth in SSS, the continued double-digit percentage increase in membership, and the high single-digit percentage growth in AUV. Despite the after-hours trading dip, Konik sees an "asymmetric risk/reward profile" for Xponential Fitness and recommends buying shares at the current levels. InvestingPro subscribers can access 8 additional key insights about XPOF, including detailed analysis of its growth prospects and financial health metrics.
The price target adjustment reflects Jefferies’ analysis of Xponential Fitness’ near-term expectations and long-term growth potential. Konik’s remarks suggest that the firm remains optimistic about the fitness company’s prospects and its ability to navigate through a phase of normalized growth while maintaining its core business strengths. While the company reported negative earnings in the last twelve months, InvestingPro data indicates analysts expect profitability this year, with projected earnings per share of $1.05 for FY2025.
In other recent news, Xponential Fitness reported mixed financial results for the first quarter of 2025. The company experienced a significant earnings per share (EPS) miss, posting an EPS of -$0.20 compared to the forecasted $0.16. Despite this, revenue came in slightly above expectations at $76.9 million, surpassing the projected $75.42 million. North American system-wide sales rose by 18% year-over-year, although consolidated revenue saw a 4% decline. Adjusted EBITDA also decreased by 9% year-over-year, reaching $27.3 million. The company is focusing on strategic initiatives such as international expansion and leadership changes to drive future growth. Analysts have noted these developments, with some firms maintaining a cautious outlook on the company’s near-term performance. Xponential Fitness plans to open between 160 to 180 new studios globally in 2025, aiming for total revenue between $315 million and $325 million.
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