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On Wednesday, DA Davidson reiterated a Neutral rating with a price target of $87.00 on shares of Planet Fitness (NYSE: NYSE:PLNT), currently trading at $90.62. The firm’s analyst highlighted the company’s fourth-quarter performance, which surpassed expectations with equipment revenue climbing by 49% year-over-year. This increase was attributed to over 60% of franchisees participating in a special program to purchase strength equipment. The company maintains impressive gross profit margins of nearly 60% and generated revenue growth of 10.13% over the last twelve months.
Planet Fitness provided guidance for 2025, anticipating a 10% revenue growth, aligning with Wall Street’s projections. However, the expected EBITDA growth of 10% falls short of the consensus estimate of approximately 15%. This discrepancy is partially due to anticipated higher compensation expenses. Despite this, the company expects to see positive SG&A (Selling, General, and Administrative expenses) leverage in 2025.
The analyst also commented on the company’s store expansion plans. While the new CEO of Planet Fitness did not commit to a specific timeline for increasing the annual number of store openings to 200, they indicated it would happen "sooner than five years out."
DA Davidson is maintaining its annual EPS (Earnings Per Share) estimates for Planet Fitness and stands by its $87 price target. This target is based on a 26 times multiple of the firm’s estimated 2026 EPS of $3.35. With a current P/E ratio of 48.67 and a market capitalization of $7.65 billion, InvestingPro data indicates the stock is trading at a high earnings multiple relative to near-term growth expectations. The company’s recent performance and future outlook were detailed in the analyst’s commentary, providing investors with insights into Planet Fitness’s current financial health and growth expectations. A comprehensive analysis of PLNT’s valuation metrics and growth potential is available in the exclusive Pro Research Report.
In other recent news, Planet Fitness reported its fourth-quarter 2024 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $0.70 compared to a forecast of $0.62. The company also exceeded revenue forecasts, reporting $340.5 million against an anticipated $323.8 million, marking a 19.4% year-over-year increase. Despite these strong financial results, RBC Capital Markets lowered its price target for Planet Fitness from $120 to $110, citing concerns over the company’s same-store sales guidance falling below consensus expectations. BofA Securities and Piper Sandler also adjusted their price targets to $115, maintaining Buy and Overweight ratings, respectively, while highlighting Planet Fitness’s robust performance and growth potential.
TD Cowen maintained a Buy rating with a $125 target, expressing confidence in the company’s strategic initiatives, including the rollout of the ’Click To Cancel’ feature. Analysts from these firms noted the company’s plans to open 160-170 new clubs in 2025, reflecting continued expansion efforts. The company’s Black Card membership saw a notable increase, with penetration reaching 64%, driven by a 200 basis point rise from the previous year. Management also highlighted Gen Z as the fastest-growing demographic for membership, accounting for nearly 10% of the base. Despite the mixed reactions to future projections and strategic changes, the overall analyst sentiment remains optimistic about Planet Fitness’s growth trajectory.
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