A month has gone by since the last earnings report for Planet Fitness (PLNT Quick QuotePLNT - Free Report) . Shares have lost about 12% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Planet Fitness due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Planet Fitness Q2 Earnings Match Estimates, Revenues Lag

Planet Fitness reported second-quarter 2022 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. However, the metrics increased on a year-over-year basis.

Earnings & Revenue Discussion

During the second quarter, the company reported adjusted earnings per share (EPS) of 38 cents, in line with the Zacks Consensus Estimate. In the prior-year quarter, the company reported adjusted earnings of 21 cents per share.

Quarterly revenues of $224.4 million fell short of the consensus mark of $231 million. However, the top line surged 63.5% from the year-ago quarter’s levels, driven by solid performances in the Franchise, Corporate-owned Stores and Equipment segments. During the quarter under review, system-wide same-store sales increased 13.6% year over year compared with growth of 15.9% reported in the previous quarter.

Total adjusted EBITDA at the end of the second quarter was $89.9 million compared with $55.6 million reported in the year-ago quarter.

Segmental Performance

During second-quarter 2022, Franchise segment revenues were $82.5 million, up 13.3% year over year. The upside was driven by a $6.2 million rise in franchise royalty revenues, a $1.6-million gain in National Advertising Fund ("NAF") revenues and a $1.7-million surge in placement revenues.

EBITDA in the Franchise segment was $54.3 million compared with $51.8 million reported in the prior-year quarter.

The Corporate-owned Stores segment’s second-quarter revenues amounted to $60.9 million compared with $40.6 million reported in the prior-year quarter. The increase can primarily be attributed to a rise in same-store sales and new store openings. The acquisition of 114 stores through the Sunshine Fitness buyout contributed $49.5 million to the segment revenues. The segment’s EBITDA totaled $39.5 million compared with $10.4 million reported in the prior-year quarter.

In the Equipment segment, revenues totaled $40.4 million compared with $23.8 million in the prior-year quarter. The uptick was primarily driven by higher equipment sales to new and existing franchisee-owned stores. EBITDA in the Equipment segment was $10.2 million compared with $5.6 million reported in the prior-year quarter.

Other Financial Details

As of Jun 30, 2022, cash and cash equivalents totaled $383.5 million compared with $471.2 million as of Mar 31, 2022. Long-term debt (net of current maturities) amounted to $1,985.7 million at the end of second-quarter 2022 compared with $1,989.5 million at the prior-quarter end.

2022 Outlook

For 2022, the company continues to expect revenues to increase in the mid-50% range over the 2021 levels. Adjusted EBITDA for 2022 is estimated to rise in the high-50% range, while adjusted net income is anticipated at the low-90% range over the 2021 levels. The company anticipates adjusted EPS to increase in the mid-80% range over the 2021 levels. The metrics are based on the assumption of potential impact from the Sunshine Fitness acquisition and that there is no significant impact of the COVID-19 pandemic.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, Planet Fitness has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Planet Fitness has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Planet Fitness is part of the Zacks Leisure and Recreation Services industry. Over the past month, Royal Caribbean (RCL Quick QuoteRCL - Free Report) , a stock from the same industry, has gained 5.1%. The company reported its results for the quarter ended June 2022 more than a month ago.

Royal Caribbean reported revenues of $2.18 billion in the last reported quarter, representing a year-over-year change of +4190.4%. EPS of -$2.08 for the same period compares with -$5.06 a year ago.

For the current quarter, Royal Caribbean is expected to post earnings of $0.37 per share, indicating a change of +107.5% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Royal Caribbean. Also, the stock has a VGM Score of D.