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Planet Fitness (PLNT) Stock Up 30% in 6 Months: More Upside Left?
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Planet Fitness, Inc. (PLNT - Free Report) is benefiting from a rise in membership count, promotional offers and digital initiatives. This and the emphasis on international expansions bode well.
The above-mentioned tailwinds backed the company in achieving impressive fourth-quarter 2022 results. Earnings and revenues surpassed the Zacks Consensus Estimate by 12.8% and 4.5%, respectively.
The contributions from the corporate-owned store segment surpassed the franchisee segment in the said year, adding to the growth of PLNT. Also, the Black Card price increase has aided growth, as the company is taking initiatives to drive membership.
Shares of PLNT have gained 29.7% over the past six months compared with the Zacks Leisure and Recreation Services industry’s growth of 8.2%. The earnings estimate for 2023 has shown improvement in the past 30 days, portraying the possible prospects for the company.
Image Source: Zacks Investment Research
Let us discuss the driving factors of PLNT.
Growth Drivers
Planet Fitness continues to focus on its marketing muscle to drive growth. The company has transitioned from 16 marketing agencies to one (Publicis Groupe) to fuel incremental member growth. The agency will look after the company’s creative and media placement for its annual New Year's sale. Consistent with the advertising strategy (covering national and local levels), the transition paves the path for lower media costs and solid member acquisition.
During the fourth quarter of 2022, the company reported solid membership conversions on the back of its marketing and promotional offers. Also, it stated to have outpaced 2019 levels. During the quarter, membership levels came in at 16.6 million compared with 16.5 million in the previous quarter. Going forward, the company expects regularized joining trends and seasonality to continue.
Planet Fitness also intends to engage its existing members via its mobile app by focusing on driving downloads, app usage and enhanced functionality such as referral incentives, in-app messaging, notifications and enhanced account management tools. In 2022, the company relaunched its PF mobile application with new and upgraded features to give every member a personalized and exclusive experience even when they do not attend the club.
Planet Fitness is focused on strategic partnerships and international expansions to drive growth. To boost its presence in Mexico, the company announced a joint venture with a prominent local retail services company and one of its largest U.S. developers. The agreement is set for developing a minimum of 80 new stores over the next five years.
The company emphasizes expanding its reach outside the United States. PLNT announced an agreement to open a Planet Fitness branch in New Zealand. Through this initiative, it expects to open 25 locations over the next several years. In 2022, PLNT opened 158 new stores system-wide, standing at a total of 2,410 stores in all 50 states of the United States, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia. Going forward, the company expects to open 1000 new stores under its existing area development agreements.
Increased focus on the acquisition of Sunshine Fitness bodes well. The company anticipates the acquisition to provide geographic diversity to its current corporate store portfolio and in markets with a long runway for future store development.
With the acquisition closed, the company now owns more than 200 corporate stores for approximately 10% of the total system. The acquisition of 114 stores through the Sunshine Fitness buyout contributed $50.4 million to the corporate-owned stores segment’s revenues during the fourth quarter of 2022.
For 2023, the company expects revenues to increase in the 13-14% range over 2022 levels. Adjusted EBITDA for 2023 is estimated to increase in the 17-18% range, while adjusted net income is anticipated at the 30-33% range over 2022 levels.
The company expects adjusted EPS to increase in the 33-36% range over 2022 levels. The metrics are based on the assumption that there is no significant impact of the COVID-19 pandemic on membership counts and no potential supply chain disruptions.
Here are some other top-ranked stocks that investors may consider in the Zacks Consumer Discretionary sector.
Ralph Lauren Corporation (RL - Free Report) currently sports a Zacks Rank #1. RL delivered a trailing four-quarter earnings surprise of 23.6% on average. Its shares have rallied 26.8% in the past six months.
The Zacks Consensus Estimate for RL’s fiscal 2024 sales and EPS suggests growth of 5.5% and 14%, respectively, from the year-ago levels.
InterContinental Hotels Group PLC (IHG - Free Report) currently flaunts a Zacks Rank #1. Shares of IHG have gained 34.6% in the past six months. The long-term earnings growth rate of the company is 13.6%.
The Zacks Consensus Estimate for IHG’s 2023 sales and EPS suggests growth of 9.8% and 18.4%, respectively, from the year-ago period’s reported levels.
Sony Group Corporation (SONY - Free Report) currently has a Zacks Rank #2. SONY has a trailing four-quarter earnings surprise of 22.2% on average. Shares of the company have gained 27.4% in the past six months.
The Zacks Consensus Estimate for SONY’s fiscal 2024 sales and EPS suggests growth of 10.3% and 6.9%, respectively.
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Planet Fitness (PLNT) Stock Up 30% in 6 Months: More Upside Left?
Planet Fitness, Inc. (PLNT - Free Report) is benefiting from a rise in membership count, promotional offers and digital initiatives. This and the emphasis on international expansions bode well.
The above-mentioned tailwinds backed the company in achieving impressive fourth-quarter 2022 results. Earnings and revenues surpassed the Zacks Consensus Estimate by 12.8% and 4.5%, respectively.
The contributions from the corporate-owned store segment surpassed the franchisee segment in the said year, adding to the growth of PLNT. Also, the Black Card price increase has aided growth, as the company is taking initiatives to drive membership.
Shares of PLNT have gained 29.7% over the past six months compared with the Zacks Leisure and Recreation Services industry’s growth of 8.2%. The earnings estimate for 2023 has shown improvement in the past 30 days, portraying the possible prospects for the company.
Image Source: Zacks Investment Research
Let us discuss the driving factors of PLNT.
Growth Drivers
Planet Fitness continues to focus on its marketing muscle to drive growth. The company has transitioned from 16 marketing agencies to one (Publicis Groupe) to fuel incremental member growth. The agency will look after the company’s creative and media placement for its annual New Year's sale. Consistent with the advertising strategy (covering national and local levels), the transition paves the path for lower media costs and solid member acquisition.
During the fourth quarter of 2022, the company reported solid membership conversions on the back of its marketing and promotional offers. Also, it stated to have outpaced 2019 levels. During the quarter, membership levels came in at 16.6 million compared with 16.5 million in the previous quarter. Going forward, the company expects regularized joining trends and seasonality to continue.
Planet Fitness also intends to engage its existing members via its mobile app by focusing on driving downloads, app usage and enhanced functionality such as referral incentives, in-app messaging, notifications and enhanced account management tools. In 2022, the company relaunched its PF mobile application with new and upgraded features to give every member a personalized and exclusive experience even when they do not attend the club.
Planet Fitness is focused on strategic partnerships and international expansions to drive growth. To boost its presence in Mexico, the company announced a joint venture with a prominent local retail services company and one of its largest U.S. developers. The agreement is set for developing a minimum of 80 new stores over the next five years.
The company emphasizes expanding its reach outside the United States. PLNT announced an agreement to open a Planet Fitness branch in New Zealand. Through this initiative, it expects to open 25 locations over the next several years. In 2022, PLNT opened 158 new stores system-wide, standing at a total of 2,410 stores in all 50 states of the United States, the District of Columbia, Puerto Rico, Canada, Panama, Mexico and Australia. Going forward, the company expects to open 1000 new stores under its existing area development agreements.
Increased focus on the acquisition of Sunshine Fitness bodes well. The company anticipates the acquisition to provide geographic diversity to its current corporate store portfolio and in markets with a long runway for future store development.
With the acquisition closed, the company now owns more than 200 corporate stores for approximately 10% of the total system. The acquisition of 114 stores through the Sunshine Fitness buyout contributed $50.4 million to the corporate-owned stores segment’s revenues during the fourth quarter of 2022.
For 2023, the company expects revenues to increase in the 13-14% range over 2022 levels. Adjusted EBITDA for 2023 is estimated to increase in the 17-18% range, while adjusted net income is anticipated at the 30-33% range over 2022 levels.
The company expects adjusted EPS to increase in the 33-36% range over 2022 levels. The metrics are based on the assumption that there is no significant impact of the COVID-19 pandemic on membership counts and no potential supply chain disruptions.
Zacks Rank & Other Key Picks
PLNT currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Here are some other top-ranked stocks that investors may consider in the Zacks Consumer Discretionary sector.
Ralph Lauren Corporation (RL - Free Report) currently sports a Zacks Rank #1. RL delivered a trailing four-quarter earnings surprise of 23.6% on average. Its shares have rallied 26.8% in the past six months.
The Zacks Consensus Estimate for RL’s fiscal 2024 sales and EPS suggests growth of 5.5% and 14%, respectively, from the year-ago levels.
InterContinental Hotels Group PLC (IHG - Free Report) currently flaunts a Zacks Rank #1. Shares of IHG have gained 34.6% in the past six months. The long-term earnings growth rate of the company is 13.6%.
The Zacks Consensus Estimate for IHG’s 2023 sales and EPS suggests growth of 9.8% and 18.4%, respectively, from the year-ago period’s reported levels.
Sony Group Corporation (SONY - Free Report) currently has a Zacks Rank #2. SONY has a trailing four-quarter earnings surprise of 22.2% on average. Shares of the company have gained 27.4% in the past six months.
The Zacks Consensus Estimate for SONY’s fiscal 2024 sales and EPS suggests growth of 10.3% and 6.9%, respectively.