Xponential Fitness Stock (XPOF) Soars – SEC Investigation Concludes Without Action

Xponential Fitness' stock price (XPOF) is up 20% in the pre-market session, with the bulls boosted by the announcement that the U.S. Securities and Exchange Commission (SEC) has concluded its investigation into the company without recommending any enforcement action.

This marks a welcome respite for investors who have witnessed XPOF's stock price drop more than half (52.63%) since the start of this year, leading into today's action. The question now is whether this rally represents a genuine turning point for the company or a temporary reprieve in a challenging landscape.

The SEC investigation, which commenced in December 2023, centered on Xponential Fitness's financial disclosures and business practices. The probe was initiated amidst allegations of misleading franchisees about the financial viability of its various fitness concepts.

The closure of the investigation without any charges represents a significant victory for the company, removing a major overhang that has weighed heavily on its stock performance. Markets clearly breathed a sigh of relief, driving the price up by over 20% in the extended trading session.

While the immediate market reaction is undoubtedly positive, a closer examination of Xponential Fitness's recent history and future prospects is warranted. The company has faced considerable headwinds, including the SEC investigation itself and a leadership transition. In May 2024, founder and CEO Anthony Geisler was suspended and subsequently resigned. The company moved swiftly to appoint Mark King, the former CEO of Taco Bell, as the new CEO in June 2024. King's extensive experience in franchising and brand management is viewed as a strategic asset, potentially providing stability and a fresh perspective to Xponential Fitness's operations.

Despite these challenges, Xponential Fitness has demonstrated some resilience in its core business. In the first quarter of 2025, the company reported a 21% year-over-year increase in North America system-wide sales, indicating continued consumer demand for its boutique fitness offerings. Furthermore, the announcement of a $100 million share repurchase program signals management's confidence in the company's financial health and its commitment to returning value to shareholders.

Analysts currently maintain a “Buy” rating on XPOF, with a 12-month price target of $13.74, representing significant upside potential from the current price levels. The next earnings date is set for July 31, 2025, which will provide further insights into the company's performance and outlook.

The company's ability to achieve sustained profitability and maintain strong relationships with its franchisees will be crucial in determining its long-term success. While the SEC's decision provides a much-needed boost, Xponential Fitness still has much to prove before it can fully regain investor confidence and reverse its long-term downtrend.