On Oct. 7, iFIT Health & Fitness (IFIT) postponed its planned IPO amid adverse market conditions. The company was scheduled to make its Nasdaq debut on Oct. 6. What’s iFIT’s forecast, and should you buy the stock?
Founded in 1977, iFIT sells fitness equipment and offers subscription-based digital workout content. The company has 6.4 million total members and 1.5 million total fitness subscribers across 120 countries.
Why has IFIT postponed its IPO?
IFIT postponed its IPO due to poor market conditions a day after the exercise equipment manufacturer was scheduled to go public. The company said that it would continue to monitor the market for more stable conditions. It isn’t clear when iFIT will move forward with its IPO.
iFIT’s decision adds to investors' concerns about volatility in capital markets. Several European companies postponed their IPO plans this week including Icade Sante and Chronext. Premium fitness chain Life Time also downsized its IPO.
IFIT’s IPO price
iFIT planned to raise nearly $600 million in the IPO by offering 30.8 million shares for $18–$21.
IFIT’s stock forecast
iFIT is the leading provider of large fitness equipment in the U.S. The company sells its products under brands including iFIT, NordicTrack, Freemotion, and ProForm. In July, iFIT completed the acquisitions of 29029, a fitness adventures event company, and Sweat, a digital fitness platform for women.
The global fitness equipment market size, valued at an estimated $11.6 billion in 2020, is set to reach $14.8 billion in value by 2028, according to a report by Allied Market Research.
Is IFIT profitable?
In fiscal 2021 (ended May 31, 2021), iFIT reported a net loss of $516.7 million compared to a net loss of $98.5 million in fiscal 2020. Its revenue rose 104.9 percent YoY to $1.7 billion in fiscal 2021. This is mainly because of a surge in demand for fitness equipment and on-demand virtual fitness classes at home. Health clubs and gyms had to shut down when the COVID-19 pandemic started.
IFIT IPO stock is a good buy
iFIT offers its patented interactive experiences on a variety of fitness modalities including bikes, treadmills, yoga equipment, fitness mirrors, rowers, and climbers. In fiscal 2021, the company sold about 10.1 million Interactive Fitness Products with a gross merchandise value of $2.8 billion. In fiscal 2021, iFIT generated 54 percent of its revenues through retailers including Amazon, Best Buy, Costco, and Decathlon.
iFIT has streamed about 142 million live and on-demand workouts across its fitness products. The company intends to broaden its subscription services and hardware offerings into areas that are organically related to fitness like mindfulness, nutrition, and recovery.
iFIT was seeking a valuation of about $7 billion in its IPO. Based on its pro forma market cap, the company’s fiscal 2021 price-to-sales multiple is 4.0x. In comparison, Peloton Interactive trades at an NTM EV-to-sales multiple of 4.7x. Overall, IFIT IPO is worth considering since the company is well-positioned in the market and the IPO appears to be fairly priced.