BofA Securities Downgrades Xponential Fitness Inc (XPOF) to Neutral, 'signs of impending risks'

BofA Securities analyst Alexander Perry downgraded Xponential Fitness Inc (NYSE: XPOF) from Buy to Neutral with a price target of $16.00 (from $35.00).

The analyst comments "We are downgrading Xponential Fitness (XPOF) to Neutral (from Buy) and lowering our PO to $16 (from $35) based on an EV of 8-9X our C24 adj. EBITDA. We believe risk/reward is now more balanced given: (1) we estimate many franchisees across Pure Barre, Row House, AKT, and Stride that required financing may not be profitable; (2) the recent rise in interest rates may be pressuring the returns of new locations; and (3) XPOF may be trying to maintain unit growth at a time when the franchise market is slowing. We also see a deceleration in net unit growth and are modeling C24-C26E EBITDA below long-term targets & consensus as less profitable units close and as XPOF moves closer to full penetration of scaled brands including Club Pilates & StretchLab, which are driving near-term average unit volumes (AUVs) & openings."

For an analyst ratings summary and ratings history on Xponential Fitness Inc click here. For more ratings news on Xponential Fitness Inc click here.

Shares of Xponential Fitness Inc closed at $14.27 yesterday.

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