William Blair analyst Sharon Zackfia has maintained their bullish stance on PLNT stock, giving a Buy rating yesterday.
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Sharon Zackfia has given her Buy rating due to a combination of factors, primarily focusing on Planet Fitness’s strategic plans and growth potential. The company’s management has outlined a robust three-year plan aiming for a low-double-digit compound annual growth rate (CAGR) in revenue, mid-teens CAGR in adjusted EBITDA, and mid- to high-teens CAGR in earnings per share (EPS). This growth strategy is supported by a significant marketing initiative where franchisees are reallocating ad fund contributions to enhance national advertising efforts.
This shift is expected to increase advertising impressions by 24%, potentially accelerating member growth beyond current expectations. The anticipated 5% to 6% comparable sales growth, driven by new member acquisitions, could lead to substantial earnings per share improvements given the company’s fixed cost model. Each percentage point increase in comparable sales is estimated to add approximately $0.05 to annual EPS, highlighting the potential financial upside. These strategic initiatives and financial projections underpin Zackfia’s optimistic outlook on Planet Fitness’s stock.
In another report released yesterday, TD Cowen also maintained a Buy rating on the stock with a $135.00 price target.