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Xponential Fitness (XPOF) Soars 9.0%: Is Further Upside Left in the Stock?

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Xponential Fitness (XPOF - Free Report) shares ended the last trading session 9% higher at $17.13. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 40.7% loss over the past four weeks.

Shares of Xponential Fitness jumped after the company provided a clarification with respect to Fuzzy Panda’s report. The company claimed the report to be false and clarified that it relocates underperforming studios to other franchisees, resulting in a likely temporary store closures during that period. It also mentioned repurchasing some underperforming studios from franchisees (in limited cases) and that it represents a small number of its overall system. The company reported strength in its franchisee unit economics. It expects operating margin of 25-30% and cash-on-cash return of 40%.

This franchisor of boutique fitness brands is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of +214.3%. Revenues are expected to be $71.93 million, up 20.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Xponential Fitness, the consensus EPS estimate for the quarter has been revised 7.6% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on XPOF going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Xponential Fitness is a member of the Zacks Leisure and Recreation Services industry. One other stock in the same industry, Planet Fitness (PLNT - Free Report) , finished the last trading session 0.9% lower at $66.44. PLNT has returned 3% over the past month.

Planet Fitness' consensus EPS estimate for the upcoming report has changed -0.3% over the past month to $0.54. Compared to the company's year-ago EPS, this represents a change of +42.1%. Planet Fitness currently boasts a Zacks Rank of #3 (Hold).

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