Planet Fitness Inc (PLNT, Financial), a prominent player in the Travel & Leisure industry, has recently experienced a notable fluctuation in its stock performance. With a current market capitalization of $6.79 billion, the stock price stands at $77.58. Over the past week, the stock has seen a decline of 2.99%, yet it has gained an impressive 20.96% over the last three months. According to GuruFocus, the current GF Value of PLNT is $101.92, suggesting that the stock is modestly undervalued. This is a shift from three months ago when the GF Value was at $109.23, and the stock was considered a possible value trap.
Introduction to Planet Fitness Inc
Planet Fitness Inc operates as a franchisor and operator of fitness centers across the United States, with additional segments in franchise operations, corporate-owned stores, and equipment sales. The company's diverse operations include franchise activities in various countries and a significant revenue stream from corporate-owned stores in the U.S. and Canada. The equipment segment further supports franchisee-owned stores through equipment sales, consolidating Planet Fitness's market presence in the fitness industry.
Assessing Profitability
Planet Fitness boasts a strong Profitability Rank of 8 out of 10, reflecting its robust financial health and market position. The company's operating margin stands at an impressive 26.12%, ranking better than 89.43% of its peers in the industry. Its Return on Equity (ROE) is exceptionally high at 10,000.00%, surpassing 99.87% of competitors, indicating an extraordinary level of profitability. Additionally, the Return on Assets (ROA) and Return on Invested Capital (ROIC) are 5.11% and 8.05% respectively, both metrics showcasing strong returns relative to the capital invested.
Growth Metrics
The Growth Rank of Planet Fitness is a perfect 10/10, underpinned by several impressive growth metrics. The 3-Year Revenue Growth Rate per Share is 35.40%, significantly higher than 70.2% of industry counterparts. Over a 5-year period, this rate stands at 13.70%, better than 87.89% of competitors. Looking ahead, the estimated Total Revenue Growth Rate for the next 3 to 5 years is 9.63%. The EPS growth rates are equally strong, with a 3-year growth rate of 382.00% and a 5-year rate of 21.60%, reflecting robust earnings potential.
Notable Shareholders
Several prominent investors hold significant stakes in Planet Fitness. Ron Baron (Trades, Portfolio) leads with 1,325,000 shares, representing 1.51% of the company. Lee Ainslie (Trades, Portfolio) follows with 500,371 shares, and Steven Cohen (Trades, Portfolio) holds 408,400 shares. Their investments underscore confidence in the company's future growth and stability.
Competitive Landscape
Planet Fitness operates in a competitive environment with key players like YETI Holdings Inc (YETI, Financial) with a market cap of $3.26 billion, Acushnet Holdings Corp (GOLF, Financial) valued at $3.9 billion, and Hasbro Inc (HAS, Financial) at $8.97 billion. Despite the stiff competition, Planet Fitness's unique positioning and strong growth metrics allow it to maintain a competitive edge in the market.
Conclusion
In conclusion, Planet Fitness Inc's recent stock performance reflects a dynamic interplay of market confidence and intrinsic value realization. The company's robust profitability, aggressive growth metrics, and strategic market positioning contribute to its current valuation as modestly undervalued. For investors, the current price presents a potentially attractive entry point, considering the company's strong fundamentals and positive growth prospects in the competitive Travel & Leisure industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
