Market Overview

Analyst On Planet Fitness: Time To Take A 'Breather' After A 'Great Run'

Analyst On Planet Fitness: Time To Take A 'Breather' After A 'Great Run'

Planet Fitness Inc (NYSE: PLNT) priced its 2015 initial public offering at $16 per share and investors who held the stock for years may want to consider taking a "breather," according to Imperial Capital.

The Analyst

Imperial Capital's George Kelly downgraded Planet Fitness from Outperform to In-Line, with a price target lifted from $38 to $40.

The Thesis

Kelly's bullish stance on Planet Fitness dates back to April 2016 and since then shares have gained 185 percent, the analyst said in a note. As such, the stock is now "fully valued" and it would be difficult to justify the case for incremental material upside from current levels.

Planet Fitness' growth over the past few years in part benefited from several one-timers, Kelly said. For example, a mid-2017 price increase and new GAAP rules that forces the company to consolidate the National Advertising Fund, which boosted revenue growth in 2018. Accordingly, revenue growth in 2019 will likely "revert to more normalized" levels.

Planet Fitness is likely to take advantage of the "muted" competition, but Kelly said this may not be the case indefinitely. There are multiple chains worth monitoring, which could create a more intensified competitive environment, such as Blink, Chuze Fitness and Crunch.

Bottom line, Planet Fitness' stock is in no way "un-attractive" but the long-term return potential isn't sufficiently large enough to warrant an Outperform rating.

Price Action

Shares of Planet Fitness were trading lower by nearly 3 percent early Friday morning after closing at $40.90.

Related Links:

Jefferies On Specialty Retail: Planet Fitness Loses Muscle, Genesco Fits Perfect

From Planet Fitness To Camping World, BofA Picks Lifestyle Brands Likely To Benefit From Tax Reform

Latest Ratings for PLNT

Jan 2021JP MorganDowngradesOverweightNeutral
Nov 2020Exane BNP ParibasInitiates Coverage OnUnderperform
Nov 2020DA DavidsonMaintainsBuy

View More Analyst Ratings for PLNT
View the Latest Analyst Ratings


Related Articles (PLNT)

View Comments and Join the Discussion!

Posted-In: fitness George Kelly GymAnalyst Color Downgrades Price Target Top Stories Analyst Ratings Best of Benzinga

Latest Ratings

EYPTCantor FitzgeraldInitiates Coverage On22.0
TXNDeutsche BankMaintains170.0
BYDDeutsche BankMaintains56.0
MELIDeutsche BankMaintains2,200.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at