On Tuesday, TD Cowen maintained a positive outlook on Planet Fitness (NYSE:PLNT) shares, with analyst Max Rakhlenko reiterating a Buy rating and a $120.00 price target. Rakhlenko expressed optimism following the fitness chain's fourth-quarter performance and key metrics, which aligned with expectations.
The company's stock has shown remarkable momentum, gaining nearly 35% over the past six months and currently trading near its 52-week high at $104.2. According to InvestingPro analysis, Planet Fitness maintains impressive gross margins of 60.3% and carries a GREAT financial health score.
The analyst highlighted the encouraging signs in key performance indicators (KPIs) after the Classic Card price increase, noting improvements in new memberships, reduced membership churn, and robust growth in the Black Card mix.
Planet Fitness ended the fiscal year with 19.7 million members, marking an increase of 100,000 from the previous quarter. The company also reported a 5.0% rise in system-wide comparable store sales for the fiscal year 2024, indicating a strong fourth quarter that met the higher end of their guidance. With a market capitalization of $8.81 billion and projected revenue growth of 16% for FY2024, the company shows promising expansion potential.
Discover more detailed insights and 15+ additional ProTips with InvestingPro, including exclusive analysis of Planet Fitness's growth trajectory and valuation metrics. In terms of expansion, Planet Fitness opened 150 new gyms in the fiscal year, which was at the high end of their forecast, including 86 new locations in the fourth quarter alone, of which 77 were franchise-operated.
The company's recent executive appointments were also a point of interest, with Chip Ohlsson set to take on the role of Chief Development Officer starting January 20, and Brian Povinelli stepping in as Chief Marketing Officer effective February 10. These new appointments complete the key C-suite positions, a move that Rakhlenko sees as bolstering the company's leadership as it aims to increase its gym openings to over 200 per year in the coming years.
Rakhlenko's commentary underscores the strength of Planet Fitness's franchise economics and the company's potential for growth.
While trading at a P/E ratio of 55.9x and currently showing signs of being overvalued according to InvestingPro's Fair Value model, the analyst's maintained price target and rating reflect confidence in the company's strategy and its execution as it continues to expand its footprint and membership base.
Access the comprehensive Pro Research Report, available for Planet Fitness and 1,400+ other top stocks, for deeper insights into the company's valuation and growth prospects.
In other recent news, Planet Fitness has reported growth in both membership and club expansion, ending the fiscal year with 19.7 million members and 150 new gym openings. The company is set to release its full fiscal year 2024 results and provide a 2025 outlook soon, with revenue growth forecast at 16% for FY2024. Analysts from TD Cowen and RBC Capital have maintained positive recommendations on the company's shares, with both firms setting a price target of $120.
In addition to these financial highlights, Planet Fitness has made significant executive appointments. Chip Ohlsson, formerly of Wyndham Hotels & Resorts, has taken on the role of Chief Development Officer, while Brian Povinelli, previously at Marriott International (NASDAQ:MAR), has been named Chief Marketing Officer. These strategic additions are seen as key to the company's ongoing efforts to expand its global presence and reinforce its market position.
These recent developments reflect a positive outlook for Planet Fitness, with analysts from TD Cowen expressing optimism following the recent appointments and RBC Capital citing the company's pricing strategy and strategic adjustments to club formats as key factors for potential growth.
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