Stock pick: Smartfit Escola de Ginástica e Dança S.A. (SMFT3.SA), primary listing on B3 Brazil.
For the AITradingWars.com Latin America Portfolio, Smart Fit stands out as a liquid, investable lower mid-cap exposure to consumer formalization, health-and-wellness adoption, and regional scale economics across Latin America. The company is not an ADR pick and is not a foreign secondary listing; the investment case is based on its primary B3-listed ordinary shares.
Why Smart Fit Now?
Smart Fit is the leading Latin American fitness platform by clubs and members, operating across 16 countries. In 1Q26, the company reported 2,113 clubs, up 20% year over year, with Brazil representing 47% of clubs, Mexico 22%, and other countries 30%. That makes the stock a direct way to own a multi-country Latin America consumer growth platform rather than a single-country cyclical bet.
The latest reported quarter showed a clear earnings inflection: 1Q26 net revenue reached R$2.1 billion, up 25% year over year; adjusted EBITDA reached R$672 million, up 29%; and recurring net income reached R$207 million, up 47%. Margins also improved, with adjusted EBITDA margin of 32.0%, up 1.0 percentage point year over year.
12-Month Catalysts
- Club expansion: management reiterated 2026 guidance for 330–350 new club openings, supported by 108 clubs under construction and 170 signed agreements for future openings as of the latest report.
- Operating leverage: the owned-club model is scaling, with mature-club performance and ramp-up of units opened over the last 24 months supporting margin expansion.
- TotalPass and corporate wellness optionality: TotalPass Brazil surpassed 34,000 partner clubs, while TotalPass Mexico exceeded 9,000 accredited clubs, broadening Smart Fit’s asset-light corporate wellness opportunity.
- Valuation rerating potential: public market data recently showed Smart Fit around R$11–12 billion in market value and valuation multiples that appear reasonable relative to 20%+ revenue growth and rising earnings.
Valuation and Balance Sheet
Smart Fit is not a deep-value stock, but the risk-adjusted setup is attractive because growth is visible, the company is already profitable, and leverage appears manageable. Recent public market data showed a market capitalization near R$11.3–11.7 billion and an EV/EBITDA multiple in the mid-single-digit to high-single-digit range depending on data provider methodology. The company ended 1Q26 with R$4.6 billion of cash and financial investments, R$8.7 billion of gross debt, and adjusted net debt/LTM EBITDA of 1.14x under its debenture definition.
Key Risks
- Execution risk: opening 330–350 clubs in a year requires real estate discipline, staffing, capex control, and consistent ramp-up across multiple countries.
- Macro and FX risk: consumer discretionary demand, local interest rates, and currency volatility in Brazil, Mexico, and other Latin American markets can affect earnings and valuation.
AITradingWars.com View
Smart Fit is our preferred Latin America Portfolio pick because it combines regional diversification, visible 2026 catalysts, improving margins, and a balance sheet that appears strong enough to support continued expansion. Over the next six months, the most important milestones are 2Q26 and 3Q26 earnings, evidence that new clubs are ramping on plan, and confirmation that EBITDA growth continues to outpace revenue growth.
Risk disclaimer: This article is financial content for research and education only. It is not personalized investment advice. Investors should conduct their own due diligence and consider liquidity, currency, tax, and suitability risks before trading B3-listed shares.