Fuzzy Panda has been criticized for releasing a scathing report. This led to a heated debate with Xponential Fitness, Xponential’s boutique gym franchisor. The report was deemed “false” by Xponential Fitness. “misleading” You can also find out more about the following: “inaccurate,” Wall Street’s supporters continue to maintain buy ratings, with an average target price of $39. Xponential Fitness, amidst all this tension, is expected to turn a profit this year and predicts doubling growth in the near future.
Important Points
1. Fuzzy Panda, a firm that specializes in short-selling, has accused Xponential Fitness – a boutique fitness franchise – of being an unethical business. “abusive franchisor” With struggling brands and operating franchisors in the “deep red”. The firm claimed that Xponential Fitness CEO Anthony Geisler has a long history of misleading business partners and investors. Xponential responded by calling Fuzzy Pan’s report “misleading” You can also find out more about the following: “inaccurate.”
2. Xponential has been backed by many Wall Street analysts, who have reiterated their buy ratings despite Fuzzy Panda’s report. They also maintain an average target price of $39. They see the company as having a long-term potential for growth and cite its previous revenue increase of 71% as a positive indication.
3. Xponential Fitness has a growth forecast based around the rapid expansion and popularity of boutique fitness brands. The company expects to open 500 new studios each year, and its popularity will drive revenue growth in the low to mid teens over time.
Xponential Fitness operates boutique gyms and is currently at the centre of a stock market battle. Fuzzy Panda published a damning report claiming that the company is in financial difficulties, but bullish Wall Street investors continue to support Xponential.
Fuzzy Panda has released a report which criticizes Xponential’s finances, branding it an “abusive franchisor that is a house of cards.” Reports suggested that franchisees of Xponential were losing money and some of its 10 fitness brands were struggling. In the report, Anthony Geisler was accused of having misled investors in the past. This caused a 37% decline in XPOF’s shares.
The next day, Fuzzy Panda was called out by Xponential for their false claims. “misleading” You can also find out more about the following: “inaccurate.” The company defended their franchise system, balance sheets, regular operations and insider ownership. Mark Grabowski, the Board Chairman, also expressed his support for XPOF and its CEO’s mission of creating long-term shareholder values. XPOF’s response temporarily eased concerns in the market, leading to a 9% rise in stock.
Wall Street analysts’ opinions on Xponential are mixed. Baird Research Group lowered their price target for XPOF from $23 to 23 dollars, acknowledging that the short report could have a long-term effect. Xponential rebuttal was heard by other analysts, who retained their buy ratings. Jefferies described the violent selloffs as “overdone,” Evercore ISI has suggested that certain business practices are worth reviewing, but they believe in the long-term success of the company.
Analysts believe XPOF is likely to recover its losses, and reach a new high record price given the target of $39. Analysts expect a profit of $39 this year. This is expected to double over the next few years.
Xponential’s revenues rose 71% post-pandemic to $265m, thanks to a membership increase of 48% since the beginning of the year. Its 2,382 U.S. Studio’s surpassed those of its two nearest competitors Orange Theory andF45. Xponential plans to open 500 studios a year, with a revenue growth of low to middle teens.
Profit growth is possible with the growing popularity of boutique fitness over large-scale providers in the affluent markets, and the benefits that come from rapid expansion. Profits can be shifted by focusing on monthly memberships, and other revenue streams that could quickly accumulate with a rapidly growing membership base.
XPOF is currently trading at around 28x earnings, which invites comparison to Planet Fitness that trades at about 31x. In 2024, XPOF will have a P/E of only 13x based on its earnings. This implies that the price is equivalent to a profit growth of over twofold.
If Fuzzy Panda’s predictions are true, then the consensus estimates may be drastically altered. By the second-quarter earnings, we will have a much better idea of XPOF.
