Subscription health and wellness platform The Beachbody Company (NYSE:) stock has been steadily falling after its three-way business combination on June 25, 2021. The special purpose acquisition company (SPAC) Forest Acquisition Corp was the vehicle for a reverse merger with The Beachbody on Demand (workout and wellness streaming content and supplements), Openfit (live trainer classes), and Myx Fitness Holdings (connected fitness equipment). The Company was a benefactor during the COVID-19 pandemic as at-home and connected fitness saw exponential growth from the closure of gyms. As the reopening is underway with largest gym operators gaining market share with mom and pop and notably iconic gyms (IE: Gold’s Gym and 24 Hour Fitness) going out of business, investors question whether at-home fitness providers will see a reversion to the normal. Beachbody is a play at home and connected fitness content and nutritional play as its subscription-based model and exclusive content is a boon especially in the winter months when gym goers prefer home workouts and preparing their beach bodies.
Q2 2021 Earnings Release
On Aug. 12, 2021, Beachbody released its fiscal second-quarter 2021 for the quarter ending June 2021. The Company reported an adjusted earnings-per-share (EPS) loss of (-$0.05) as revenues rose 2.1% year-over-year (YoY) to $223.11 million. Two-year revenues growth was 21%, 55% increase in subscriptions and 75% total streams growth of 75%. The Company closed the quarter with $347.2 million in cash with no debt. Beachbody will accelerate growth 30% with growth in bike units, BOD launch and increased medial investment in H2 2021. The Company sees full-year 2021 revenues of $930 million to $960 million and adjusted EBITDA loss of (-$110 million) to (-$100 million).
Beachbody CEO Carl Daikeler commented:
“Over the last two decades, Beachbody has established itself as a worldwide leader in subscription health & wellness through the development of compelling digital fitness content and proprietary nutritional products that deliver results for millions of customers. Completing our merger, adding connected fitness to the Beachbody portfolio, and bringing Beachbody to the public market has now set the stage for a multi-year period of accelerated growth. The addition of Myx enhances our holistic approach to health & wellness and provides us with a tremendous opportunity to serve our customers with the enhancements they have been asking for, specifically, a high quality connected indoor bike and live content produced with the same innovation that has been Beachbody’s signature since the days of P90X. Looking ahead, we believe the business is poised to benefit from several drivers, including our first ever Beachbody brand advertising campaign, the launch of our new live interactive content subscription offering BOD Interactive (BODi (BBCZ)), and the sell-in of the MYX bike to our customer base and powerful network of coaches and influencers.”
The Digital Disruption in Fitness
CEO Daikeler boldly stated:
“The digital disruption of fitness is here, unlocking and expanding the total addressable market. Beachbody is uniquely positioned at the forefront of three megatrends driving this shift—the rise of digital streaming subscriptions, the popularity of connected fitness and the heightened demand for effective health & wellness solutions. Beachbody has a proven approach, with entry points across multiple platforms and our long history of successfully acquiring, engaging, and retaining subscribers. While we remain keenly aware that the near-term COVID variant and macro conditions present heightened uncertainty as we head into the second half of the year, I remain very upbeat on our long-term prospects and confident in our ability to scale the business and create significant shareholder value as conditions begin to normalize.”
BODY Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for BODY stock. The weekly rifle chart breakdown has an inverse pup and stochastic mini inverse pup downtrend with a falling 5-period moving average (MA) at the $11.01 Fibonacci (fib) level and weekly lower Bollinger Bands (BBs) at the $9.25 fib. The weekly market structure low (MSL) buy triggers above $10.83. The daily final chart has an ugly inverse pup breakdown powered by the stochastic low band mini inverse pup. The daily 5-period MA resistance is falling at $9.75 with lower daily BBs near the $8.73 fib. The charts are not pretty to say the least, but they are creating an opportunity in spite of the panic selling. Prudent and risk-tolerant investors opportunistic pullback levels at the $8.73 fib, $8.28 fib, $7.87 fib, $7.51 fib, $6.98 fib, and the $6.44 fib level. The upside trajectories range from the $12.05 fib up to the $15.03 fib level.