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On Tuesday, Piper Sandler reaffirmed a Neutral rating with a $9.00 price target on Xponential Fitness Inc (NYSE:XPOF). The company’s stock, currently trading at $7.47, has not shown significant movement post its fourth-quarter earnings release, experiencing a decline of 30% due to a softer guidance and limited visibility. According to InvestingPro data, the stock has declined 44.46% year-to-date, with analyst targets ranging from $9 to $32. Despite recent tariff announcements, Xponential Fitness shares have not been significantly impacted, which analysts suggest might indicate the stock reaching a potential floor, thus attracting some investor attention.
Similar to Planet Fitness (NYSE:PLNT), Xponential Fitness is considered to be somewhat insulated from direct macroeconomic effects. The company maintains impressive gross profit margins of 66.34%, though InvestingPro analysis indicates short-term obligations exceed liquid assets. There is a concern that consumer spending cutbacks could affect membership trends. Analysts expect that the management might acknowledge these potential challenges, although current guidance could remain unchanged. For the first quarter, there are no strong indicators that the company will substantially underperform or outperform expectations.
The current market position of Xponential Fitness could offer a temporary boost to the stock price, given its valuation. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued, with 12 additional exclusive insights available to subscribers. Nonetheless, analysts believe any uplift might be ephemeral without positive revisions to estimates or resolution to the ongoing uncertainties regarding the company’s investigation and financial restatements. Piper Sandler’s reiterated stance reflects a cautious outlook on the company’s near-term performance potential.
In other recent news, Xponential Fitness reported a notable earnings miss for Q4 2024, with earnings per share (EPS) at -$0.19, significantly below the forecasted $0.38. Despite this, the company’s revenue slightly exceeded expectations, coming in at $83.2 million compared to the anticipated $81.42 million. The company also announced a net loss of $62.5 million for the quarter. In a strategic financial move, Xponential Fitness secured an additional $10 million in term loans, extending the maturity date of its credit facilities to August 1, 2027. These funds are aimed at general corporate purposes, including working capital and legal expenses.
Analysts have been adjusting their outlooks on Xponential Fitness. Piper Sandler lowered the stock’s price target to $9.00, maintaining a Neutral rating, citing challenges in the company’s outlook and unit growth trajectory. Stifel also downgraded the stock from Buy to Hold, reducing the price target to $12, due to operational challenges and financial restatements. On a more optimistic note, Jefferies cut the price target to $32 but retained a Buy rating, highlighting the company’s robust business model and positive indicators from the earnings report, such as mid-single-digit same-store sales growth and membership increases.
These developments reflect ongoing efforts by Xponential Fitness to navigate financial and operational challenges while aiming for future growth and stability.
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