Xponential Fitness, Inc. (NYSE:XPOF) is a leading global franchisor of boutique fitness brands. The company offers a variety of fitness experiences through its diverse portfolio, which includes brands like Club Pilates, Pure Barre, and CycleBar. Xponential Fitness operates in a competitive market alongside companies like F45 Training Holdings Inc. and Life Time Group Holdings, Inc.
In evaluating Xponential Fitness, the focus is on its Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC). Xponential Fitness has a ROIC of 6.61% and a WACC of 28.18%, resulting in a ROIC to WACC ratio of 0.23. This indicates that the company is not generating returns that exceed its cost of capital, suggesting inefficiencies in capital utilization.
Comparatively, F45 Training Holdings Inc. has a negative ROIC of -209.08% against a WACC of 13.01%, leading to a ROIC to WACC ratio of -16.07. This highlights significant financial challenges, as the company is not efficiently using its capital to generate returns. Similarly, Treace Medical Concepts, Inc. shows inefficiency with a negative ROIC of -33.86% and a WACC of 10.31%.
Life Time Group Holdings, Inc. presents a slightly better scenario with a ROIC of 4.39% and a WACC of 6.83%, resulting in a ROIC to WACC ratio of 0.64. Although its ROIC is below its WACC, the gap is narrower compared to Xponential Fitness. Meanwhile, Zeta Global Holdings Corp. has a positive ROIC of 0.48% but still falls short of its WACC of 9.18%.
Sovos Brands, Inc. stands out with a ROIC of 5.54% and a WACC of 5.21%, achieving a ROIC to WACC ratio of 1.06. This indicates efficient capital utilization, as the company generates returns that exceed its cost of capital, making it the most efficient among the peers analyzed.
