Basic-Fit Model update: premiumization cannibalises membership growth

We lower our estimates after the 3Q23 trading update published last Friday. While we were already the lowest on the street in terms of underlying EBITDA, we further cut our top line to reflect a lower than expected membership growth. In terms of average yield per member our previous estimate of EUR 24.5 in FY24 is in line with the newly given guidance.
9 November 2023 Basic-Fit will host its CMD and will give an updated view on its long term targets. It is likely our long term estimates change after this update. However, the 3Q23 update triggers us to already cut our FY24-25 estimates further. This results in an updated TP of EUR 32.0 down from EUR 39.0. per share. The drop in our target price is explained by slower membership growth. Premiumization positively impacts the average yield per member (ARPU) but decreases the total amount of members. The key to maximize the top line is to find a balance in increasing the average yield per member while avoiding cannibalisation from premium memberships.