Planet Fitness (PLNT) has drawn fresh attention after a board reshuffle and finance leadership change, bringing in Levi Strauss executive Harmit Singh as director and reinstating seasoned company veteran Tom Fitzgerald as Interim CFO.
See our latest analysis for Planet Fitness.
At a share price of US$74.34, Planet Fitness has seen a 30 day share price return of 18% decline and a 90 day share price return of 33% decline, contributing to a 1 year total shareholder return of 27% loss. This suggests that the recent leadership changes are being weighed against existing concerns rather than sparking fresh momentum so far.
If these board and CFO moves have you thinking about where else capital could work harder, this is a good moment to widen the search with 20 top founder-led companies
With Planet Fitness shares down sharply over the past year and trading at a discount to some valuation estimates, the key question is simple: is the stock offering value today, or is the market already pricing in future growth?
Most Popular Narrative: 43% Undervalued
With Planet Fitness last closing at $74.34 and the most followed narrative pointing to a fair value around $130, the gap between price and modelled worth is wide and raises questions about what assumptions sit underneath that view.
Analysts are assuming Planet Fitness's revenue will grow by 11.6% annually over the next 3 years. Analysts assume that profit margins will increase from 16.2% today to 19.3% in 3 years time.
Want to see what kind of earnings profile that combination of revenue growth and margin expansion builds in the model? The fair value view leans on richer profitability and a premium future P/E multiple, all pulled back to today using a single required return. The exact hurdles baked into that narrative are where the real story starts.
Result: Fair Value of $130 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, click-to-cancel driven attrition and any slowdown or cannibalisation in new club openings could quickly test the higher growth and premium P/E assumptions.
Find out about the key risks to this Planet Fitness narrative.
Another Way Of Looking At It
That $130 fair value uses growth and margins to argue Planet Fitness is 43% undervalued. The market, though, is currently paying about 27x earnings, compared with a 21x P/E for the US Hospitality industry, 20.7x for peers, and a fair ratio of 23.7x. That richer multiple can tighten upside if sentiment cools.
To see how this earnings multiple stacks up against the detailed valuation work, it is worth stepping through the numbers in the See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If this mix of questions and optimism feels familiar, treat it as a cue to review the facts yourself and move fast on forming a view with 3 key rewards and 2 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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