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Investing.com - Raymond (NSE:RYMD) James raised its price target on Planet Fitness (NYSE:PLNT) to $122.00 from $110.00 on Wednesday, while maintaining a Strong Buy rating on the fitness center operator’s stock. The company, currently trading at $105.93 with a market capitalization of $8.92 billion, has demonstrated impressive gross profit margins of nearly 60% according to InvestingPro data.
The new price target is based on a price-to-earnings multiple of 36 times Raymond James’ 2026 adjusted earnings per share estimate of $3.40, compared to the previous target which applied a 38 times multiple to the firm’s 2025 estimate of $2.90. Currently, Planet Fitness trades at a P/E ratio of 50.23x, reflecting the market’s high growth expectations. Unlock deeper valuation insights and 12 additional ProTips with InvestingPro.
Raymond James cited several key growth drivers for Planet Fitness, including the new Classic Card pricing and a likely increase in Black Card pricing later this year that is not currently reflected in the firm’s outlook or guidance.
The investment firm also highlighted an acceleration in new store openings and international expansion as factors supporting its positive outlook on the company.
Despite the price target increase, Raymond James noted that the valuation multiple still represents a discount to Planet Fitness’s five-year average forward P/E of 39-40 times, which the firm believes is warranted given the current higher interest rate environment, heightened macroeconomic uncertainty, and the company’s more mature growth profile.
In other recent news, Planet Fitness reported its second-quarter 2025 earnings, surpassing expectations. The company posted an earnings per share (EPS) of $0.86, exceeding the forecast of $0.79, and achieved revenue of $340.9 million, beating the anticipated $329.56 million. Despite these positive earnings and revenue results, the stock experienced a decline in pre-market trading. In addition, Planet Fitness reported same-store sales growth of 8.2%, surpassing consensus estimates of 5.9%. This marks the 16th consecutive quarter of mid-single-digit or higher comparable sales growth. Jefferies reiterated its Buy rating and set a price target of $175.00 for Planet Fitness, attributing the strong performance to reaccelerating same-store sales and expanding margins. Jefferies also highlighted that the White Card price increase continues to drive comparable sales performance. These recent developments reflect the company’s ongoing financial strength and market position.
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