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On Tuesday, Piper Sandler adjusted its price target for Planet Fitness (NYSE:PLNT) shares, lowering it to $115 from the previous target of $123, while maintaining an Overweight rating on the stock. Currently trading at $90.61, the stock carries a P/E ratio of 48.6x, with analyst targets ranging from $85 to $150. InvestingPro analysis shows the stock is currently trading near its Fair Value, with 12 additional key insights available to subscribers. The firm’s analysts noted that Planet Fitness reported a strong fourth quarter. The management’s cautious outlook for 2025 was acknowledged, but the analysts pointed out that the company still has several growth drivers that should support its continued expansion.
The report highlighted that, despite the unexpected increase in personnel expenses, the overall cost structure of Planet Fitness remains well-managed, evidenced by its impressive gross profit margin of 60.33%. This gives the analysts confidence in the company’s ability to achieve more significant growth in the future. InvestingPro’s comprehensive financial health assessment rates the company as "GOOD," with particularly strong scores in profitability metrics. The analysts were optimistic about the potential positive impact of an upcoming investor day, which they believe could serve as a catalyst by providing the new management team with an opportunity to outline their medium to long-term plans more clearly.
The analysts recommended buying Planet Fitness shares amidst the current weakness, signaling their belief in the stock’s potential for growth despite the lower price target. They emphasized the company’s solid performance in the last quarter and the presence of strong factors that could contribute to healthy growth moving forward.
The report by Piper Sandler concluded with a positive outlook on Planet Fitness, suggesting that the company’s disciplined cost management and strategic growth initiatives position it well for future success. With a projected revenue growth of 16% for FY2024 and a strong year-to-date return of 55.77%, the analysts’ maintained Overweight rating indicates their confidence in the stock’s performance relative to the market. For deeper insights into Planet Fitness’s growth potential and valuation metrics, investors can access the detailed Pro Research Report available on InvestingPro.
In other recent news, Planet Fitness Inc . reported its fourth-quarter 2024 earnings, surpassing Wall Street expectations with an earnings per share (EPS) of $0.70 compared to the projected $0.62. The company also reported revenue of $340.5 million, exceeding the anticipated $323.8 million, marking a 19.4% increase year-over-year. Despite these strong financial results, the stock experienced a decline in premarket trading. Planet Fitness has outlined plans to open 160-170 new clubs in 2025, aiming for a revenue growth target of approximately 10% and adjusted EBITDA growth of 10%. Analyst feedback from firms such as BMO Capital Markets and Jefferies highlighted the company’s strategic initiatives and expansion plans. The company has also announced a focus on enhancing franchisee economics and unit development. Additionally, Planet Fitness emphasized its commitment to its new brand promise and the growing appeal among younger demographics, particularly Gen Z.
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