Xponential Fitness, Inc. (NYSE:XPOF) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America. The company’s loss has recently broadened since it announced a US$22m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$62m, moving it further away from breakeven. As path to profitability is the topic on Xponential Fitness’ investors mind, we’ve decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Xponential Fitness
According to the 12 industry analysts covering Xponential Fitness, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$21m in 2023. So, the company is predicted to breakeven approximately 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 108%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Xponential Fitness’ growth isn’t the focus of this broad overview, however, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we would like to bring into light with Xponential Fitness is it currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. These losses tend to occur only on paper, however, in other cases it can be forewarning.
Next Steps:
This article is not intended to be a comprehensive analysis on Xponential Fitness, so if you are interested in understanding the company at a deeper level, take a look at Xponential Fitness’ company page on Simply Wall St. We’ve also put together a list of pertinent aspects you should look at:
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Valuation: What is Xponential Fitness worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Xponential Fitness is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Xponential Fitness’s board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
