Planet Fitness: Strong Revenue Growth and Membership Increase Support Buy Rating

William Blair analyst Sharon Zackfia has reiterated their bullish stance on PLNT stock, giving a Buy rating on May 1.

Sharon Zackfia’s rating is based on a combination of factors that highlight Planet Fitness’s potential for growth and profitability. Despite a slight miss in consensus expectations for the first quarter, the company demonstrated strong revenue growth, particularly in equipment sales and high-margin franchised revenue. This indicates a robust demand for Planet Fitness’s offerings and a positive trajectory in its business operations.
Furthermore, the company achieved a significant increase in memberships, which aligns with their growth strategy and supports future revenue potential. Although there was a contraction in EBITDA margin due to the mix of low-margin equipment sales, the overall financial performance, including a rise in adjusted EPS, suggests a solid foundation for continued success. These factors collectively underpin Zackfia’s Buy rating for Planet Fitness, reflecting confidence in the company’s strategic direction and market position.

In another report released on May 1, RBC Capital also maintained a Buy rating on the stock with a $110.00 price target.

Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PLNT in relation to earlier this year.