Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures
Planet Fitness (PLNT): Initiation of Coverage – Pricing Power Meets Strategic Modernization – Can Member Elasticity and Franchisee Buy-In Unlock the Next Growth Chapter?
Planet Fitness delivered strong Q3 2024 results, with revenue growing 5.3% year-over-year to $292.25 million, beating estimates by $6.99 million, while adjusted EPS of $0.64 exceeded expectations by $0.06. System-wide same-club sales grew 4.3%, driven by membership expansion, pricing gains, and a 100-basis-point YoY increase in Black Card membership mix to 63.1%, underscoring pricing power and upsell success. Adjusted EBITDA improved 10% to $123.1 million, with margins expanding to 42.1% due to operational efficiencies. Franchise EBITDA margins reached 71.1%, reflecting strong unit-level alignment, while corporate-owned clubs posted a 39.3% EBITDA margin, supported by modernized operations and equipment upgrades. Management raised FY24 guidance, projecting 8%-9% revenue and EBITDA growth alongside 11%-12% EPS growth, highlighting confidence in ongoing pricing elasticity, marketing traction, and unit growth momentum. Strategic investments include a pivot to strength-focused equipment (60% of clubs by year-end) and smaller-format clubs, enhancing domestic and international scalability. Risks include regulatory challenges like the FTC click-to-cancel rule, which elevated churn in some geographies, though broader stabilization mitigates systemic impact. With a strong liquidity position, manageable leverage (3.7x), and valuation at ~20.56x forward EV/EBITDA, Planet Fitness is well-positioned to sustain growth. Can Planet Fitness capitalize on pricing elasticity, operational modernization, and franchisee engagement to accelerate both domestic and international growth while maintaining its high-margin business model?