Analysts expect this fitness company to grow at an annual rate of 28.2% over the next five years.
Planet Fitness, Inc. (PLNT)
From Equity Research & Portfolio Evaluation, Inc.
Friendly staff, brand name equipment, and a comfortable atmosphere--all for just $10 a month. That is what makes Planet Fitness, Inc. (PLNT) the best gym value on the “planet”. It’s the largest, fastest growing franchisers of fitness centers. The company operates over 1,600 fitness centers with approximately 11 million members in 50 states as well as Puerto Rico in Canada.
PLNT meets 8-of-9 (88%) of my selection criteria. The company in the Leisure-Services industry group. While a soft economy would typically hurt a consumer discretionary stock, PLNT’s value proposition will help it avoid such risk.
Fundamentally, PLNT is solid. It is the #1 stock based on current relative price strength in its peer group. The mid-cap growth company sports a 3-year earnings CAGR of 44%. PLNT’s 3-year revenue CAGR is 17%. The company’s annual pre-tax margin is nearly 32%. Planet Fitness has had 43 straight quarters of positive same-store sales.
Institutional market participants support this stock. Mutual fund ownership has doubled in two years. In December of 2016, 258 funds owned PLNT. Now, over 500 do. Nearly 8% of the company’s management owns the stock.
Planet Fitness is ‘un-Amazonable’ because health and wellness can’t be purchased online. Over 95% of its stores are owned and operated by franchisees and more than 90% of all of the new territory sold was bought by existing franchisees. That sums up the company’s profit potential and the strength of the brand and business model.
John J. Gardner, Equity Research & Portfolio Evaluation, Inc., www.erpeinc.com, 925-216-4968, January 31, 2018