Valuing SoulCycle

In late 2014 SoulCycle management was preparing for its IPO. Founded in 2006 in Manhattan, the high-end cycling studio was planning to expand to 47 studios by mid-2015, with locations in eight metropolitan markets. With a celebrity following and studios operating at or near capacity, SoulCycle management expected to open 10 to 15 studios per year going forward. But competition was heating up in the niche cycling segment and cautionary tales in the broader fitness segment—like that of Bally Fitness and DavidBartonGym—were well known. In this case, students consider how to place a value on SoulCycle—and whether mainstream fitness companies, athletic apparel manufacturers, or providers of high-end spa and leisure services would provide the best comparable by which to estimate SoulCycle's growth and revenue trajectory.