F45 Training Holdings Inc (FXLV) Stock

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Contributor, Benzinga
September 3, 2021
Last update: 3:52PM (Delayed 15-Minutes)
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Vol / Avg.12.265K / 82.191KMkt Cap14.628M
Day Range0.150 - 0.15052 Wk Range0.000 - 1.170

If you’re like many of your fellow Americans who sheltered in place and maintained the isolationist lifestyle, you probably experienced an unwanted side effect in your efforts to promote the greater good: expansion of your waistline. In fact, Dr. Gregory Marcus, who published a peer-reviewed research paper at JAMA Open Network, noted that on average, quarantined Americans gained nearly 2 pounds per month.

One person that’s having none of this nonsense is Mark Wahlberg. Backing the initial public offering (IPO) of F45 Training Holdings Inc, a community-based fitness franchisor, Wahlberg aims to get you (and your portfolio) in shape.

F45 Training Holdings Financial History

As with any other high-contract or community-based business model, the fitness center industry suffered devastating losses during the COVID-19 crisis. Therefore, investors will need to carefully consider whether the more acute risk-reward profile of FXLV stock matches their tolerance for possibly substantial volatility.

From the S-1 filing, F45 Training Holdings revealed that for its year ended Dec. 31, 2020, the company generated revenue of $82.3 million, which is down 11% from 2019’s tally of $92.7 billion. On the surface, this performance doesn’t appear that terrible considering the circumstances. For instance, Planet Fitness (NYSE: PLNT) rang up almost $407 million in 2020, representing a staggering loss of 41% year-over-year.

But before you sing (or rap) F45’s praises, you should beware that in the full year 2020, the fitness franchisor ballooned its net loss to $25.3 million from a loss of $12.6 million in 2019. Conversely, Planet Fitness generated a rising trend of positive net income between 2015 through 2019, only suffering a net loss during the pandemic-disrupted 2020. More importantly, based on its trailing two quarters, Planet Fitness appears on pace to resume its profitability.

Unfortunately, it’s difficult to have the same confidence regarding F45 Training. In its Q1 2021 (ended March 31), the fitness brand suffered a whopping net loss of nearly $37 billion. This negative tally compares extremely unfavorably to Q1 of the prior year when F45 produced a net loss of $733,000.

Finally, buyers should be aware of F45’s revenue growth (or lack thereof) moving forward. In Q1 2021, the top line suffered a loss of 27%, raising eyebrows because rival Planet Fitness’ sales declined by only 12% during the same frame.

F45 Training Holdings Potential

At this point, you might be tempted to avoid the F45 Training IPO based on both the company’s questionable financial performance and the unknowns involving the pandemic. Certainly, another wave of coronavirus infections risks derailing not only this offering but the entire fitness center industry, as it did the first time. But you’ll want to consider these factors before walking away.

Primarily, F45 leverages star power. While the details about this celebrity influence are fuzzy, there’s zero question about Mark Wahlberg’s support and his sway with Hollywood A-listers. Furthermore, the actor carries a likable personality, balancing his tough-guy persona with comedic flair. Just as importantly, Wahlberg is a fitness guru, which aligns with F45’s core ethos.

As you’ll note from the meme stock phenomenon, sometimes, investments don’t need fundamental justification; they just need a narrative. And who better to provide a compelling storyline than a global superstar?

Many Americans naturally developed a sedentary personality due to the unprecedented impact of the pandemic. And as Women’sHealth points out, you’re more likely to succeed in your fitness goals with an accountability partner. That’s exactly what F45’s mission statement is — leverage the power of community to promote fitness for everyone.

How to Buy F45 Training Holdings (FXLV) Stock

In almost every traditional IPO process, underwriters embark on roadshows to meet potential investors to both drum up interest for the public offering and ensure that enough demand is available. Therefore, underwriters only focus on institutional investors, not regular retail buyers, which represent lower profitability potential.

However, Robinhood has stepped up to democratize the rarefied IPO arena by essentially acting as an institutional investor on behalf of individual buyers. With FXLV stock, you have two choices: you can sign up for Robinhood’s IPO Access program to purchase pre-IPO shares or you can buy FXLV at the open.

For the latter, if you already know how to buy stocks, you can acquire F45 shares without the vagaries of the pre-IPO process. If you need a refresher, review these steps.

Step 1: Pick a brokerage.

Thanks to the advent of connectivity technologies, you have access to a wide range of free to low-cost investing platforms. With fees being a lesser concern in the modern era, you should choose a broker that best suits your needs and preferences. Here are best brokers to help you get started.

Step 2: Decide how many shares you want.

Take some time to review your intended share count purchase, which will ultimately determine your risk-reward profile. A higher share count affords you greater profitability should your target stock rise in value. But the opposite is also true if it incurs volatility.

Step 3: Choose your order type.

Before placing your trade, be sure to understand the below concepts.

  • Bid: The bid is the buyer’s highest offer. It is always lower than the ask.
  • Ask: In contrast, the ask is the lowest price a seller will accept. It is always higher than the bid.
  • Spread: The difference between the bid and ask price, the spread also entails market liquidity and risk. Tighter spreads suggest higher liquidity and reduced risk because of buyer availability for sellers. Wider spreads indicate lower liquidity and greater risk.
  • Limit order: To trade stock only at a specific price, use a limit order. However, there is no guarantee that your order will be fulfilled.
  • Market order: For convenience, you can trade shares at the prevailing rate through market orders. Buy orders execute on the ask and sell orders on the bid.
  • Stop-loss order: An automated protective function for your portfolio, a stop-loss order exits your position at a predetermined (requested) price or the next available price, whichever comes first. Watch out for gap-down sessions, which may cause your stop-loss order to fill well below your requested price.
  • Stop-limit order: To fully control your protective profile, use a stop-limit order to facilitate automated exits only at the predetermined price. However, there is no fulfillment guarantee.

Step 4: Execute your trade. 

To execute a market order, follow these steps:

  1. Select action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

The limit order sequence is the same, except you must enter your desired execution price.

Making America Fit Again

From the pop charts to the big screen to a franchise owner, Wahlberg has seemingly done it all. But his latest project — supporting an IPO to bring fitness and profitability to everyday Americans — could be his most ambitious. While risk factors are prevalent, F45 Training could soar above the criticisms thanks to a compelling demand backdrop and substantive star power.

About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.