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Planet Fitness (PLNT) Up 27.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Planet Fitness (PLNT - Free Report) . Shares have added about 27.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Planet Fitness due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Planet Fitness Q1 Earnings & Revenues Miss Estimates
Planet Fitness reported first-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. Notably, earnings missed the consensus mark after beating in the preceding 19 quarters. Moreover, both top and bottom lines declined sharply year over year owing to the coronavirus pandemic.
Quarterly Details
Adjusted earnings came in at 16 cents per share, which missed the Zacks Consensus Estimate of 36 cents. The bottom line also declined 54.3% on a year-over-year basis.
Meanwhile, revenues of $127.2 million lagged the Zacks Consensus Estimate of $157 million and declined 14.5% on a year-over-year basis. The top line was impacted by dismal franchise and equipment sales. However, system-wide same-store sales improved 9.8% year over year in the quarter under review.
Franchise revenues decreased 11% to $58.5 million. The Corporate-owned Stores segment’s revenues improved 6.5% year over year to $40.5 million. In the Equipment segment, revenues declined 37.4% to $28.2 million owing to decreasing lower equipment sales to new and existing franchisee-owned stores.
Moreover, EBITDA in the Franchise segment declined 22.4% to $36.7 million. The segment EBITDA for the first quarter does not reflect $18.7 million of deferred royalty and national advertising fund revenue, which was collected but not recognized due to coronavirus-induced store closure. At the Corporate-owned stores segment, EBITDA fell 22.9% to $12 million. Moreover, the same declined 38.8% to $6.4 million at Equipment segment.
Total adjusted EBITDA at the end of the first quarter fell to $46.5 million from $63.5 million in the year-ago quarter.
Other Financial Details
As of Mar 31, 2020, cash and cash equivalents totaled $547.5 million compared with $436.3 million as of Dec 31, 2019. Long-term debt, net of current maturities, amounted to $1,684.7 million at the end of first-quarter 2020 compared with $1,687.5 million at 2019 end.
Coronavirus Update
Due to the coronavirus pandemic, the company’s CEO, president, chief financial and chief digital and information officers have taken a significant pay cut. The company has furloughed all employees except the store manager at each corporate-owned store location. In an effort to provide liquidity, the company has withdrawn $75.0 million variable funding notes.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -113.99% due to these changes.
VGM Scores
Currently, Planet Fitness has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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.
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Planet Fitness (PLNT) Up 27.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Planet Fitness (PLNT - Free Report) . Shares have added about 27.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Planet Fitness due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Planet Fitness Q1 Earnings & Revenues Miss Estimates
Planet Fitness reported first-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. Notably, earnings missed the consensus mark after beating in the preceding 19 quarters. Moreover, both top and bottom lines declined sharply year over year owing to the coronavirus pandemic.
Quarterly Details
Adjusted earnings came in at 16 cents per share, which missed the Zacks Consensus Estimate of 36 cents. The bottom line also declined 54.3% on a year-over-year basis.
Meanwhile, revenues of $127.2 million lagged the Zacks Consensus Estimate of $157 million and declined 14.5% on a year-over-year basis. The top line was impacted by dismal franchise and equipment sales. However, system-wide same-store sales improved 9.8% year over year in the quarter under review.
Franchise revenues decreased 11% to $58.5 million. The Corporate-owned Stores segment’s revenues improved 6.5% year over year to $40.5 million. In the Equipment segment, revenues declined 37.4% to $28.2 million owing to decreasing lower equipment sales to new and existing franchisee-owned stores.
Moreover, EBITDA in the Franchise segment declined 22.4% to $36.7 million. The segment EBITDA for the first quarter does not reflect $18.7 million of deferred royalty and national advertising fund revenue, which was collected but not recognized due to coronavirus-induced store closure. At the Corporate-owned stores segment, EBITDA fell 22.9% to $12 million. Moreover, the same declined 38.8% to $6.4 million at Equipment segment.
Total adjusted EBITDA at the end of the first quarter fell to $46.5 million from $63.5 million in the year-ago quarter.
Other Financial Details
As of Mar 31, 2020, cash and cash equivalents totaled $547.5 million compared with $436.3 million as of Dec 31, 2019. Long-term debt, net of current maturities, amounted to $1,684.7 million at the end of first-quarter 2020 compared with $1,687.5 million at 2019 end.
Coronavirus Update
Due to the coronavirus pandemic, the company’s CEO, president, chief financial and chief digital and information officers have taken a significant pay cut. The company has furloughed all employees except the store manager at each corporate-owned store location. In an effort to provide liquidity, the company has withdrawn $75.0 million variable funding notes.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -113.99% due to these changes.
VGM Scores
Currently, Planet Fitness has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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.