Planet Fitness
PLNT
$50.36
+2.57%
Planet Fitness, Inc. is a leading franchisor and operator of fitness centers, primarily in the United States, with a presence in Canada, Puerto Rico, Panama, Mexico, and Australia. The company operates through three segments: Franchise, Corporate-owned stores, and Equipment, with the majority of revenue generated from corporate-owned locations. Known for its affordable, high-value, and judgment-free fitness experience, Planet Fitness has carved out a distinct niche as a low-cost, high-volume gym chain, differentiating itself from boutique and premium competitors. Currently, the stock is under intense scrutiny as it navigates a sharp decline in share price, driven by a significant drop in May 2026, likely due to a major operational or financial event, while analysts remain cautiously optimistic about its long-term growth prospects.…
PLNT
Planet Fitness
$50.36
Investment Opinion: Should I buy PLNT Today?
Based on the analysis, I rate PLNT as a Hold. The stock has a consensus Buy rating from analysts with an average target of $68.68, implying ~34% upside, but the severe price decline and negative ROE warrant caution. The thesis is that the company's strong revenue growth and high gross margins are offset by high leverage and profitability concerns, making the risk-reward balanced at current levels. Key supporting evidence includes the 21.89% revenue growth, 82.6% gross margin, forward PE of 14.25x, and $267M TTM free cash flow. However, the negative ROE and high debt-to-equity ratio are red flags. The rating would upgrade to Buy if the company demonstrates improved profitability (e.g., ROE turning positive) and the stock holds above the 52-week low, or downgrade to Sell if revenue growth decelerates below 10% or the company faces liquidity issues. Overall, the stock appears fairly valued relative to its forward earnings, but the high risk warrants a cautious approach.
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PLNT 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The strong revenue growth and attractive forward valuation are positive, but the negative ROE and high leverage introduce significant risk. The stock's severe decline suggests the market has already priced in many negatives, but the wide analyst target range indicates uncertainty. If the company can demonstrate improved profitability in the coming quarters, the stance would upgrade to bullish. Conversely, if revenue growth slows or debt issues escalate, the stance would turn bearish.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Planet Fitness's 12-month outlook, with a consensus price target around $67.25 and implied upside of +33.5% versus the current price.
Average Target
$67.25
0 analysts
Implied Upside
+33.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$47 - $106
Analyst target range
The target price range of $47.00 to $133.00 is extremely wide, reflecting high uncertainty about the company's future. The high target assumes a full recovery and multiple expansion, likely driven by the company's strong revenue growth and potential for margin improvement. The low target prices in continued operational challenges or a prolonged downturn. Recent institutional ratings show a mix of actions, with JP Morgan maintaining an Overweight rating on July 9, 2026, and several firms like UBS, Wells Fargo, and RBC Capital reiterating Buy/Outperform ratings in May 2026. However, B of A Securities downgraded from Buy to Neutral, and TD Cowen moved from Buy to Hold, indicating some caution. The wide spread in targets and mixed recent actions suggest that the stock is at a critical juncture, with high potential upside but also significant risk.
Bulls vs Bears: PLNT Investment Factors
Planet Fitness presents a classic high-risk, high-reward scenario. The bull case is anchored by strong revenue growth, high gross margins, and a compelling forward valuation, while the bear case is driven by a severe stock decline, negative ROE, and high leverage. Currently, the bearish evidence is more prominent given the stock's 51.7% annual decline and the negative ROE, but the forward PE of 14.25x and analyst consensus Buy rating suggest that the market may be pricing in a recovery. The most critical tension is whether the company can translate its revenue growth into sustainable profitability and earnings growth, which would validate the forward estimates and drive the stock toward the average target of $68.68. If the company fails to meet these expectations, the stock could continue to slide toward the 52-week low of $37.03.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 21.89% YoY to $337.2M, accelerating from prior quarters. This demonstrates robust demand for the low-cost fitness model, which is a key driver of the bull case.
- High Gross Margin: Gross margin stands at 82.6% (TTM), reflecting the asset-light franchise model and strong pricing power. This high margin provides a solid foundation for profitability.
- Analyst Consensus Buy: With a mean rating of 1.83 (Buy) and an average target of $68.68, analysts see significant upside of ~34% from the current price of $51.21. This suggests the market may be overly pessimistic.
- Forward PE Attractive: The forward PE of 14.25x is well below the trailing PE of 41.4x, implying the market expects a substantial earnings recovery. If EPS reaches the estimated $3.59, the stock is reasonably valued.
Bearish
- Severe Stock Decline: The stock has fallen 51.74% over the past year and is down 44.1% in the last 6 months, with a max drawdown of -61.24%. This reflects deep investor pessimism and potential fundamental concerns.
- Negative ROE: Return on equity is -45.3%, indicating the company is not generating sufficient profit relative to shareholder equity. This is a red flag for profitability and capital efficiency.
- High Debt Levels: Debt-to-equity is -6.0x, suggesting significant leverage and potential financial risk. The negative equity base amplifies the impact of debt on the balance sheet.
- Wide Analyst Target Range: Analyst targets range from $47 to $133, a spread of $86, indicating extreme uncertainty about the company's future. This wide dispersion reflects conflicting views on the company's recovery prospects.
PLNT Technical Analysis
Planet Fitness is in a pronounced downtrend over the past year, with the stock price down 51.74% from a year ago, currently trading at $51.21. This places the stock at approximately 44.8% of its 52-week range (between the low of $37.03 and high of $114.26), indicating it is closer to the lows than the highs. The stock's 6-month change of -44.1% underscores the severity of the decline, while the 1-year relative strength of -73.20% versus the S&P 500 highlights significant underperformance. The current price is 55% below the 52-week high, suggesting that the market has repriced the stock dramatically lower, potentially reflecting fundamental concerns or a de-rating.
Beta
1.02
1.02x market volatility
Max Drawdown
-61.2%
Largest decline past year
52-Week Range
$37-$114
Price range past year
Annual Return
-52.0%
Cumulative gain past year
| Period | PLNT Return | S&P 500 |
|---|---|---|
| 1m | -3.6% | +2.9% |
| 3m | -4.3% | +5.0% |
| 6m | -44.5% | +13.9% |
| 1y | -52.0% | +20.4% |
| ytd | -54.1% | +13.8% |
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PLNT Fundamental Analysis
Planet Fitness reported revenue of $337.236 million for Q1 2026 (ending March 31, 2026), representing a 21.89% year-over-year increase from $276.662 million in Q1 2025. This growth is a notable acceleration from the prior year's quarters, where revenue grew from $300.941 million in Q2 2024 to $340.879 million in Q2 2025, indicating a consistent upward trajectory. The company's revenue segments show a diversified mix, with Franchise revenue of $102.249 million, Equipment revenue of $62.147 million, and Advertising revenue of $32.218 million, though the corporate-owned stores segment remains the largest contributor. The robust growth suggests strong demand for its fitness offerings, but the sustainability of this growth is a key question given the recent stock price collapse.
Quarterly Revenue
$337236000.0B
2026-03
Revenue YoY Growth
+21.9%
YoY Comparison
Gross Margin
38.9%
Latest Quarter
Free Cash Flow
$267378000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is PLNT Overvalued?
Given that Planet Fitness has positive net income, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE stands at 41.40x, while the forward PE is 14.25x, implying that the market expects a significant increase in earnings per share (from $1.24 trailing to $3.59 forward). This wide gap suggests that the market is pricing in a substantial earnings recovery, likely due to the one-time charges or operational issues that depressed recent earnings. The PEG ratio of 1.36x indicates that the stock is reasonably valued relative to its expected earnings growth, but the reliance on forward estimates introduces uncertainty.
PE
41.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 27x~111x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
20.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are substantial. The company's negative return on equity (-45.3%) indicates that it is not generating adequate returns on shareholder capital, which could signal underlying profitability issues. Additionally, the high debt-to-equity ratio (-6.0x) suggests significant leverage, which increases financial risk, especially if interest rates remain elevated. The company's reliance on corporate-owned stores for the majority of revenue exposes it to operational risks such as labor costs and store-level performance. While revenue growth is strong at 21.89% YoY, the sustainability of this growth is uncertain, and any slowdown could pressure the stock further. The negative equity base also limits financial flexibility, making it harder to weather downturns or invest in growth.
FAQ
The key risks of holding PLNT include: 1) Financial risk from high leverage (debt-to-equity of -6.0x) and negative ROE (-45.3%), which could lead to liquidity issues. 2) Operational risk from reliance on corporate-owned stores, which are more capital-intensive and subject to labor and occupancy costs. 3) Market risk from the stock's high beta (1.025) and sensitivity to economic cycles, as fitness spending is discretionary. 4) Competitive risk from boutique fitness studios and at-home fitness options that could erode market share. The most severe risk is a continued decline in profitability, which could push the stock toward the 52-week low of $37.03, a potential -27.7% downside from the current price.
The 12-month forecast for PLNT is uncertain, with three scenarios: Bull case (25% probability) targets $68.68-$133, driven by strong earnings recovery and analyst upgrades. Base case (50% probability) targets $51.21-$68.68, assuming moderate growth and gradual improvement. Bear case (25% probability) targets $37.03-$47, if profitability worsens or debt issues escalate. The most likely scenario is the base case, which assumes the company maintains its growth trajectory but faces ongoing challenges. The key assumption is that revenue growth continues at 15-20% and EPS meets forward estimates.
Based on the forward PE of 14.25x, PLNT appears undervalued relative to its expected earnings growth, especially when compared to the trailing PE of 41.4x. The PEG ratio of 1.36x suggests the stock is reasonably valued relative to its growth rate. However, the negative ROE and high debt levels introduce uncertainty, and the wide analyst target range ($47-$133) reflects this. The market is pricing in a significant earnings recovery, as evidenced by the gap between trailing and forward PE. If the company meets these expectations, the stock is undervalued; if not, it could be overvalued.
PLNT is a high-risk, high-reward stock. The analyst consensus is Buy with an average target of $68.68, implying ~34% upside from the current price of $51.21. However, the stock has fallen 51.7% over the past year and has a negative ROE of -45.3%, indicating significant financial stress. For investors with a high risk tolerance and a long-term horizon, the stock could be a good buy if the company successfully executes its growth strategy and improves profitability. However, for conservative investors, the risks may outweigh the potential rewards. It is crucial to monitor the company's ability to meet forward EPS estimates and manage its debt.
PLNT is more suitable for long-term investment, given its growth potential and the current undervaluation on forward earnings. The stock has high volatility (beta of 1.025) and has experienced a severe drawdown, making it risky for short-term trading. The company's revenue growth of 21.89% YoY and high gross margins suggest it could deliver strong returns over a 3-5 year horizon if profitability improves. However, the negative ROE and high debt levels require careful monitoring. A minimum holding period of 3 years is recommended to allow the company to execute its growth strategy and for the market to recognize its value. Short-term traders may find opportunities in the volatility, but the risk is high.