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Monday, Planet Fitness (NYSE:PLNT) shares, currently trading at $96.22, received a positive outlook from BMO Capital Markets, with analysts raising the price target on the company’s stock to $110 from $100 while maintaining an Outperform rating. According to InvestingPro data, analyst targets for the stock range from $82 to $150, reflecting diverse market expectations. The firm’s decision followed recent meetings with Planet Fitness’s CEO, CFO, COO, and VP of Investor Relations.
During the discussions, management expressed enthusiasm about the company’s future prospects. Their confidence appears well-founded, with InvestingPro data showing impressive gross profit margins of 59.7% and a healthy current ratio of 2.08, indicating strong financial stability. They covered a range of topics including pricing strategies, new unit openings and their economic impact, methods for acquiring and retaining members, marketing efforts, approaches to reduce seasonal fluctuations, and strategies to lower member turnover. Additionally, they addressed how Planet Fitness might succeed in the event of an economic downturn.
The new management team, which has been in place for some time, appeared confident and deliberate in deciding what aspects of the business to change and what to maintain. BMO Capital analysts noted this approach in their commentary, stating the team’s thoughtful consideration of these factors.
BMO Capital expressed a belief in the strength of Planet Fitness’s core business, anticipating it will continue to generate long-term value and describing the company as a compelling compounder. The firm’s price target of $110 is based on approximately 32 times the projected fiscal year 2026 earnings per share (EPS).
Planet Fitness’s stock outlook reflects the company’s robust business model and strategic initiatives that aim to drive growth and stability, even in challenging economic conditions.
In other recent news, Planet Fitness reported a stronger-than-expected performance in its fourth-quarter earnings, with adjusted earnings per share (EPS) reaching $0.70, surpassing BofA Securities’ estimate of $0.62. The company also noted a significant 49% year-over-year increase in equipment revenue, attributed to a special program involving over 60% of franchisees. Additionally, Planet Fitness anticipates a 10% revenue growth for 2025, although it expects EBITDA growth of 10%, falling short of the consensus estimate of 15%. DA Davidson maintained a Neutral rating with a price target of $87, while TD Cowen reaffirmed a Buy rating with a $125 target, despite some market confusion over the company’s guidance.
RBC Capital Markets adjusted its price target for Planet Fitness from $120 to $110, citing concerns over the company’s same-store sales guidance, which was 0.9% below consensus expectations. Meanwhile, BofA Securities also lowered its price target from $130 to $115, maintaining a Buy rating and highlighting the company’s robust same-club sales growth and increased Black card membership penetration. Planet Fitness’s recent bylaw amendment introduces proxy access for stockholders, allowing them greater influence over board composition, reflecting the company’s commitment to enhancing stockholder rights. The company plans to implement a ’Click To Cancel’ feature in the second quarter, which is expected to increase membership churn temporarily but is not anticipated to significantly impact comparable store sales.
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