Head-To-Head Review: Xponential Fitness (NYSE:XPOF) and NIP Group (NASDAQ:NIPG)

Xponential Fitness (NYSE:XPOF) and NIP Group (NASDAQ:NIPG) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Xponential Fitness and NIP Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xponential Fitness	0	4	4	2	2.80
NIP Group	0	0	1	0	3.00

Xponential Fitness currently has a consensus price target of $17.17, suggesting a potential upside of 24.13%. NIP Group has a consensus price target of $12.00, suggesting a potential upside of 73.91%. Given NIP Group’s stronger consensus rating and higher probable upside, analysts plainly believe NIP Group is more favorable than Xponential Fitness.

Earnings and Valuation

This table compares Xponential Fitness and NIP Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xponential Fitness	$326.72 million	2.04	-$17.48 million	($1.16)	-11.92
NIP Group	$84.45 million	4.58	N/A	N/A	N/A

NIP Group has lower revenue, but higher earnings than Xponential Fitness.

Profitability

This table compares Xponential Fitness and NIP Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Xponential Fitness	-9.15%	-4.37%	1.94%
NIP Group	N/A	N/A	N/A

Insider and Institutional Ownership

58.5% of Xponential Fitness shares are owned by institutional investors. 47.8% of Xponential Fitness shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Xponential Fitness beats NIP Group on 6 of the 11 factors compared between the two stocks.

About Xponential Fitness

Xponential Fitness, Inc., through its subsidiaries, operates as a boutique fitness franchisor in North America. It offers pilates, indoor cycling, barre, stretching, rowing, dancing, boxing, running, functional training, and yoga services under the Club Pilates, Pure Barre, CycleBar, StretchLab, Row House, YogaSix, Rumble, AKT, Stride, and BFT brands. Xponential Fitness, Inc. was founded in 2017 and is headquartered in Irvine, California.

About NIP Group

Our mission is to create transformative esports experiences that entertain, inspire and connect fans across the globe. Our vision is to become the premier esports organization in the world. We are a leading esports organization with the most expansive global footprint by virtue of our operations across Asia, Europe and South America, according to the Frost & Sullivan Report. Among the top ten esports titles in the world in terms of prize pool, our wins in tier-1 world tournaments in CS:GO, Honor of Kings, Rainbow Six and FIFA represent more unique game titles with top-tier wins than any other esports organization as of January 31, 2023, according to the Frost & Sullivan Report. We were founded based on a passion for esports and belief that esports can create the same types of historical and legendary experiences and memories as traditional sports have for the past century. We operate two esports brands: Ninjas in Pyjamas and eStar Gaming. Ninjas in Pyjamas, our PC/console esports brand, was founded in 2000 in Sweden, while eStar Gaming, our mobile esports brand, was founded in 2014 in China. Competing at the highest levels in multiple esports titles over two decades, Ninjas in Pyjamas has earned recognition as one of the most storied, recognized and iconic brands in the esports world. At the same time, eStar Gaming, our mobile esports brand, is the top team in the Honor of Kings King Pro League (KPL), one of the most successful teams in KPL history in terms of titles and widely considered to be the most successful mobile esports team in the world, according to the Frost & Sullivan Report. We have a comprehensive portfolio of esports teams, competing at the highest level in video game titles such as League of Legends, CS: GO, Honor of Kings, Rainbow Six, Rocket League, Fortnite and Call of Duty Mobile. We believe that there is tremendous potential in what we refer to as the “esports+” model, with the first phase being competitive esports itself — building championship-caliber teams across the most popular esports titles. NIP Group is currently at the second phase of esports+, supplementing our competitive esports business with our talent management, event production, creative studios, and burgeoning advertising businesses to create a diverse and sustainable revenue stream driving our continued growth. Going forward, we believe that we are only limited by our imagination for the third phase of esports+, and are actively exploring opportunities in areas such as esports education and training, fan universe (B2C monetization and metaverse), digital collectibles, esports real estate and IP licensing. As of December 31, 2023, we have provided esports education related services to more than 12 educational institutions in cities including, among others, Guangzhou, Xi’an, Wuhan, Guiyang and Zhongshan, and we are aiming to bring our contents and services to 50 educational institutions across China by the end of 2025. We anticipate costs associated with our undertaking of esports education business to include staff costs as well as costs related to content development, professional training and brand building. We plan to finance our esports education business through capital contribution or shareholder loans. In addition, we have also entered into collaboration agreements with digital collectibles platforms in China, where digital collectibles featuring our IPs have been listed since November 2022. Costs associated with the collaborations consist mainly of the design, technical and operational service fees we paid to a third-party vendor for these digital collectibles. We incurred costs associated with digital collectibles of RMB32,715 in 2023. Aiming to create a global benchmark for esports+, we are also actively creating our proprietary IPs in the fields of fashion, art and metaverse. In 2022 and 2023, we launched over 20 IP collaborations with companies spanning the telecommunication, automobile, sportswear, and various other industries, introducing co-branded vehicles, peripherals, clothing, beauty products, beverages, and gift boxes. We also license companies to use the image, including AI and virtual image of our athletes for promotion. We are exploring new ways of IP collaborations leveraging our abundant resources, and expand into the fields of entertainment, education and tourism. To build our competitive edge, we are committed to give more unique attributes to our existing IPs, and will actively develop new IPs such as esports reality shows, series and movies, esports electronic festivals, exhibitions, fan arts and virtual idols, to meet the evolving market demand. As of the date of this prospectus, in addition to our current brand partners, we are negotiating potential collaborations with more than ten companies ranging over industries such as smart devices, energy drinks and dairy products, as well as companies with tourism and entertainment businesses. We expect to further expand our IP collaborations to 40 by 2025. We have not incurred any significant cost associated with our IP collaborations, nor do we expect there being material costs for our future initiatives. Currently, we are focused on developing talent for both our esports teams and greater roster of online entertainers. On the esports side, we have combined Ninjas in Pyjamas’s 20-plus years of development experience as well as eStar Gaming’s demonstrated success in the burgeoning competitive mobile games market in the past five years. Our talent management business also focuses on developing esports athletes to become successful online entertainers, extending their success in the esports world further to the entertainment world. In 2020, Jackson Wang, one of the world’s most famous pop idols and one of the most followed male artists on Instagram, with approximately 33 million followers as of April 30, 2024, joined us as a partner and beneficial shareholder. We experienced robust growth in our net revenues, which increased from US$65.8 million in 2022 to US$83.7 million in 2023. Our gross profit also increased from US$3.7 million in 2022 to US$7.2 million in 2023, representing gross profit margins of 5.7% and 8.6% for the same years, respectively. Our principal executive offices are located at Rosenlundsgatan 31, 11 863, Stockholm, Sweden. Our registered office in the Cayman Islands is located at the offices of Osiris International Cayman Limited, Suite #4-210, Governors Square, 23 Lime Tree Bay Avenue, PO Box 32311, Grand Cayman KY1-1209, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor New York, NY.