Shares of Exponential Fitness are holding firm at $35 target By Investing.com

On Monday, Evercore ISI maintained a positive outlook on Xponential Fitness Inc (NYSE:XPOF), reiterating an Outperform rating alongside a firm price target of $35.00. The company-by-company position remains optimistic, highlighting the strong background of the new CEO, who brings experience from key areas of franchising.

The company’s leadership, whose history includes TaylorMade, adidas North America, and Taco Bell, is praised for its ability to drive growth. The CEO’s tenure at Taco Bell was marked by significant growth and competitive performance, which is seen as a beneficial attribute of Exponential Fitness.

Evercore ISI’s trust in Exponential Fitness is based on the belief that the CEO’s experience in large franchise transactions will be an asset. The restaurant and hotel trade sectors have been identified in particular as industries with the necessary scale and size to provide the necessary background to successfully lead XOFF.

The company’s analysis suggests that the CEO’s professional background, which has spanned many high-profile companies, equips him with a strong foundation for his role at Exponential Fitness. The company is expected to benefit from this leadership, as it aims to excel in the competitive fitness industry.

In other recent news, Exponential Fitness Inc. has seen significant improvements. The company has completed the divestiture of its Row House brand to Extraordinary Brands, a move consistent with its strategic refocusing of its core product portfolio. This change is not expected to materially affect the company’s revenue or EBITDA for 2024, with financial guidance remaining unchanged.

The company also saw leadership changes with the resignation of CEO Anthony Geisler, and the appointment of Interim CEO Brenda Morris. Despite this, Exponential Fitness reported a record membership of 796,000 in April, indicating the brand’s strong appeal.

Based on analyst ratings, Roth/MKM initiated coverage on Exponential Fitness, assigning a buy rating and a target price of $22.00. This positive outlook is based on the company’s strong fundamentals and growth trajectory.

However, Baird lowered the company’s stock price from $14 to $10, maintaining a neutral rating due to uncertainties including the resignation of the CEO and ongoing investigations by regulatory authorities. Similarly, Lake Street Capital Markets lowered its price target to $23 from $32, despite the company’s consistent performance in meeting or exceeding earnings estimates.

InvestingPro Insights

As Xponential Fitness Inc (NYSE:XPOF) benefits from the new franchise CEO’s extensive experience, the company’s financial metrics and market performance provide more context for investors. According to InvestingPro data, XPOF currently has a market cap of $723 million and an attractive price-to-earnings (P/E) ratio of 6.61, which also adjusts to 11.02 when looking at the last twelve months from Q1 2024. This is lower than most earnings suggesting the stock may be undervalued relative to its earnings potential.

InvestingPro Tips highlights that the management’s aggressive share buybacks and impressive gross profit margins, which stand at 69.61% in the last twelve months from Q1 2024, may be an indication of the company’s confidence in its growth and efficiency. In addition, despite the price falling last year, there was a strong return in the last month of 28.07%, which shows the optimism of potential investors.

It is worth noting that analysts have revised down their future earnings expectations. Still, the company’s strong earnings over the past twelve months and this year’s earnings forecast remain key points of interest. With these details in mind, investors can get more bang for their buck by checking out the 10 additional InvestingPro Tips available on XPOF at For those thinking of diving deeper, use the coupon code. PRONEWS24 for an additional 10% discount on Pro and Pro+ annual or bi-annual subscriptions.

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