Imperial Capital Pumps Up Planet Fitness' Price Target
Planet Fitness Inc (NYSE: PLNT) reported its 2Q results ahead of expectations. The company’s brand strength “continues to resonate in new geographies,” Imperial Capital’s George Kelly said in a report. He maintained an Outperform rating on the company, while raising the price target from $22 to $25.
Planet Fitness reported its 2Q revenue and adj. EBIDTA at $91.5 million and $36.8 million, ahead of the Imperial Capital estimates of $85.5 million and $33.2 million, respectively. The upside was driven by system-wide SSS growth of 7.6 percent, which in turn was on account of higher member levels. The results were also boosted by incremental EBITDA margin of almost 50 percent.
The franchise business grew 37 percent y/y to $25.5 million, while the take rate grew 45bps y/y to 3.43 percent.
Management raised its full-year guidance for the second time. The revenue and EPS forecasts for 2016 were raised from $360-$370 million to $366-$372 million and from $0.60-$0.63 to $0.62-$0.65, respectively. Planet Fitness still plans to open 210-220 new stories in 2016.
The guidance seems to be “very achievable,” Kelly commented.
“Planet Fitness’ brand continues to resonate in new geographies. Management commented that Canada, the western U.S., and the Dominican Republic are tracking similarly, and we believe it is likely the company will expand to additional countries in the coming quarters,” Kelly wrote.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email firstname.lastname@example.org with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Latest Ratings for PLNT
|Aug 2016||Imperial Capital||Maintains||Outperform|
|Jun 2016||JP Morgan||Assumes||Overweight|
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.