Planet Fitness Is Poised For Sustainable Growth, Says Bullish Analyst

Shares of Planet Fitness Inc PLNT were rising in the premarket on Friday, after tanking last week on the company’s disappointing earnings release.

The earnings season plays a key role in investors’ action plans for the future.

The recent selloff in Planet Fitness’ stock offers an attractive entry point, according to RBC Capital Markets.

The Planet Fitness Technologies Analyst: Christopher Carril initiated coverage of Planet Fitness with an Outperform rating and a price target of $86.

The Planet Fitness Thesis: The company has a highly franchised model, which should generate solid and sustained earnings growth in a "normalized" post-COVID-19 pandemic environment, Carril said in the initiation note.

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“We expect this to be driven in-part by sustained +HSD% same-store sales growth, with our view supported by compelling marketing (e.g. High School Summer Pass),” the analyst wrote.

“Given the majority of PLNT's top-line is derived from stable and predictable sources (e.g. franchise royalties/fees, corp. store membership dues, etc.), we see PLNT's model as attractive in a still uncertain macro,” he added.

Carril further mentioned Planet Fitness could generate “EPS growth of +37% in 2023, followed by >20% growth thereafter.”

PLNT Price Action: Shares of Planet Fitness are down 1.28% to $68.77 Friday morning at publication.

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