Xponential Fitness Reports First Loss since IPO, Shares Down 3.1%

Shares of Xponential Fitness, Inc. (XPOF) were down 3.1% in Tuesday’s extended trading session after the largest boutique fitness franchisor in the United States reported a second-quarter loss during its debut results announcement since its IPO in July.

The company reported a net loss of $0.33 per share versus a loss of $0.58 per share reported in the prior-year period.

On the positive side, revenues jumped 67% year-over-year to $35.8 million compared to $21.5 million in the prior-year quarter. The increase in revenues reflected a surge in system-wide sales, which increased 179% to $171.6 million. Further, system-wide, same-store sales increased 129% year-over-year.

Based on strong Q2 revenues growth, the company provided guidance for Fiscal 2021. The company forecasts revenues of $135.5 to $137 million, while adjusted EBITDA is estimated to range between $22 and $23 million. (See Xponential Fitness stock charts on TipRanks)

Xponential Fitness CEO Anthony Geisler said, “Thus far in Q3, this positive trajectory has continued. In July, we recorded our highest-ever monthly system-wide sales, and our August results to-date remain solid. So far in August, compared to the end of Q2, we’ve seen an increase in our total memberships and our actively paying members, both overall and at a per studio level.”

He further added, “Looking ahead, we are confident in our ability to continue expanding our market share in the large and growing boutique fitness industry as we unlock the incredible power of the Xponential platform.”

Guggenheim analyst John Heinbockel recently initiated coverage on Xponential fitness with a Buy rating and the price target of $16 (34.8% upside potential).

Heinbockel commented, “Not only is the business well-positioned to grow N-T member and spending share amid rebounding demand and reduced capacity, but the presence of nine leading, but very different, brands each benefiting from critical X Factors around studio openings, programming, and operations lays the foundation for a sustainable 15-20% secular algo.”

Consensus among analysts is a Strong Buy based on 7 Buys and 1 Hold. The average Xponential Fitness price target of $17.07 implies 43.8% upside potential to current levels.

XPOF scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.