Xponential Fitness (XPOF) Stock Forecast & Price Target

Xponential Fitness Inc. has demonstrated strong financial performance, with a 15% year-over-year increase in total membership and a 9% improvement in average membership per store during the fourth quarter, indicating robust consumer demand. The company's key revenue driver, Club Pilates, achieved an impressive average unit volume (AUV) of over $1 million, growing nearly 9.5% year-over-year, and contributed significantly to system-wide sales with 56% of the total. Additionally, management's proactive approach to enhancing sales performance and reducing labor costs, alongside strategic expansions in North America and internationally, presents a compelling outlook for growth beyond 2025.

Xponential Fitness Inc. has projected adjusted EBITDA of $120M-$125M, which falls significantly short of market expectations, primarily due to higher-than-anticipated selling, general, and administrative (SG&A) expenses. The decline in average unit volumes (AUVs) for StretchLab, dropping from $625K to $550K over two years, along with negative comparable performances for 2024, raises substantial concerns about future earnings potential. Additionally, despite slight improvements in system sales guidance, lower expectations surrounding equipment installations, territory fees, and merchandise sales, coupled with a decline in revenue and unit openings, contribute to an overall negative outlook for the company's financial health.