Maksim Labkouski
Jefferies thinks the deal struck by Xponential Fitness (NYSE:XPOF) on Monday to acquire health brand Lindora provides upside for the company. Under the deal, the 31 existing Lindora clinics will become XPOF franchise locations. Due to the strong cashflow of the existing Lindora locations, the acquisition is anticipated to be immediately accretive on both an AUV and an Adjusted EBITDA basis. Financial terms were not disclosed.
Analyst Randal Konik said Xponential Fitness (XPOF) should benefit as it will have ample opportunity to scale the sub-100 unit brand over time and fitness-adjacent Lindora brand operates within the fast-growing weight management market, which is forecast to grow from ~$22B in 2021 to ~$400B in 2030. The acquisition was also said to be largely in line with the firm’s view that a boot camp concept or a hydration-focused business with opportunities to scale would make the most sense for the California-based company.
Jefferies has a Buy rating on Xponmential Fitness (XPOF) and price target of $45. “We believe Xponential’s portfolio of strong brands, growing studio footprint, and expanding digital capabilities (XPASS & XPLUS) are likely to further boost XPOF’s competitive positioning in the global fitness industry,” updated Katz. The firm kept a price target of $45 on XPOF.
Shares of Xponential Fitness (XPOF) fell 1.46% in afternoon trading on Monday to $14.22 v. the 52-week range of $11.31 to $33.58. The stock is down more than 36% on a year-to-date basis. Short interest on XPOF stands at 18.9% of the total float.