F45 (NYSE:FXLV) just IPO’d, and FXLV stock has been treading water as investors remain uncertain of the future of gyms. We believe this uncertainty is misplaced, however.
The future of gyms is certain — gyms as they once existed won’t make a big comeback anytime soon.
But people love to workout. They love to be healthy. And they want to look good.
The future of working out exists in alternative spaces, and traditional gyms won’t play as significant a role as they once did.
And that’s why the near-term uncertainty responsible for FXLV’s post-IPO lackluster performance doesn’t phase us at all.
People Will Always Want to Look Good
We live in a social media driven world where everyone is constantly sharing pictures of themselves via TikTok, Snapchat, Instagram and more.
Demand for working out won’t go anywhere.
We aren’t concerned about gyms shutting down, because we see the emerging health and fitness trends that aren’t confined to the space of a “gym.” Old-school gyms have lost their appeal for most people, and how people working out is changing.
We believe “alternative workouts” are the future of fitness and are far superior than regular gym workouts in many ways.
They’re often either cheaper (free YouTube workouts), more convenient (Peloton (NASDAQ:PTON) workouts in your garage) or more engaging (fitness classes in a social setting with a specific trainer). Or some combination of the above. Peloton classes, for example, can include a social aspect, despite being taken at home.
For these reasons, alternative workouts will continue to steal share from traditional gyms. We believe as many as 50% or more of folks who were regularly attending gyms in 2019 will end up quitting their gym subscriptions in favor of an alternative workout regimen.
F45 Leads at Social Fitness
And F45 is the cream of the crop in the social fitness niche of the alternative workout market. So we have no doubts that F45 will survive and thrive well into the future.
The company provides engaging, focused and community-oriented 45-minute workout classes that everyone raves about.
And that isn’t an exaggeration. Looking at the plethora of reviews on F45, the only consistent complaint is with regard to price. If price is the only complaint, then you know F45 must be providing a fantastic, beneficial service to its members.
F45 also has momentum in its corner as of late. They recently formed a marketing partnership with Mission.
This is evidence of F45’s prominent workout community. Specifically, with F45 you have a community where doing huge marketing events actually makes sense.
Imagine if 24 Hour Fitness or LA Fitness attempted to pull off a marketing stint like this. It would be silly.
F45 can pull it off because its users love the brand so much.
We really like FXLV stock in the long term. And if anything, its recent uncertainty-driven weakness should be seen as a golden buying opportunity.
FXLV is but one of my top picks in the fitness world. Yes, long-term, FXLV stock will score investors big returns, but it’s far from the only hypergrowth stock on my radar.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.