Xponential Fitness, Inc. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

There's been a notable change in appetite for Xponential Fitness, Inc. (NYSE:XPOF) shares in the week since its quarterly report, with the stock down 10% to US$29.66. Revenues of US$71m beat expectations by 7.0%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of US$1.38 compared to previous analyst expectations of a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Xponential Fitness

Taking into account the latest results, the most recent consensus for Xponential Fitness from twelve analysts is for revenues of US$298.3m in 2023 which, if met, would be a solid 12% increase on its sales over the past 12 months. Earnings are expected to improve, with Xponential Fitness forecast to report a statutory profit of US$0.92 per share. In the lead-up to this report, the analysts had been modelling revenues of US$295.0m and earnings per share (EPS) of US$0.95 in 2023. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$36.08, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Xponential Fitness, with the most bullish analyst valuing it at US$45.00 and the most bearish at US$30.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Xponential Fitness' past performance and to peers in the same industry. We would highlight that Xponential Fitness' revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2023 being well below the historical 50% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. Even after the forecast slowdown in growth, it seems obvious that Xponential Fitness is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Xponential Fitness going out to 2025, and you can see them free on our platform here..

Even so, be aware that Xponential Fitness is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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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.