Planet Fitness The Center Of The Health And Fitness Universe

Jefferies maintained its Buy rating and raised its price target by $1 to $26 on Planet Fitness Inc (NYSE: PLNT) following the second quarter beat that further vindicated the company's business model.The brokerage said franchising model offers growth visibility, capital light and reduces risk to the company, while the royalty rate naturally rises providing opportunity for higher margins. More than 80 percent of the company's revenues are "recurring" in nature.Planet Fitness reported second quarter system-wide comps of +7.6 percent, ahead of the Street's +5.9 percent forecast, as total membership grew 18 percent to 8.6 million."We are highly impressed with PLNT's ability to consistently drive membership growth, which demonstrates the company's broad customer appeal and ability to grow the market (40% of PLNT's members said they had never belonged to a gym before)," analyst Randal Konik wrote in a note.In addition, Planet Fitness is on track to open 210-220 stores in FY16, and it gradually approaches its 4,000 store target (vs. current 1,206) over the coming years.Following the second quarter beat and more favorable outlook (including +HSD% comps vs. prior +MSD% guide), the analyst raised his estimates for 2016 and 2017."With the ability to nearly quadruple its store base along with rising margins and powerful FCF, we view PLNT as a rare and resilient growth story that should be a core holding for the LT," Konik added.At the time of writing, shares of Planet Fitness climbed 9.79 percent to $22.32. The shares touched a 52-week high of $23.12 on the day.