| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 71.52 | -21 |
| Intrinsic value (DCF) | 56.82 | -38 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 35.94 | -61 |
Planet Fitness, Inc. (NYSE: PLNT) is a leading franchisor and operator of fitness centers under the Planet Fitness brand, known for its affordable, judgment-free gym experience. Founded in 1992 and headquartered in Hampton, New Hampshire, the company operates through three segments: Franchise, Corporate-Owned Stores, and Equipment. With over 2,250 locations across the U.S., Canada, and select international markets, Planet Fitness targets casual gym-goers with low-cost memberships and a non-intimidating environment. The company’s business model thrives on high-volume, low-price memberships, supplemented by equipment sales to franchisees. As a key player in the $35B+ U.S. fitness industry, Planet Fitness benefits from secular trends favoring health and wellness, though it faces competition from boutique studios and digital fitness platforms. Its capital-light franchise strategy enables rapid expansion while minimizing corporate overhead.
Planet Fitness presents a compelling growth story in the fitness sector, leveraging its scalable franchise model and mass-market appeal. The company’s low-price positioning insulates it somewhat from economic downturns, as evidenced by its resilient membership base. However, its high debt load ($2.58B) and lack of dividends may deter conservative investors. Competitive pressures from digital fitness (e.g., Peloton) and rising labor costs pose risks, while international expansion offers upside. With a beta of 1.33, PLNT exhibits higher volatility than the broader market. Valuation appears rich at ~7.5x revenue (2023), demanding sustained unit growth and margin improvement to justify multiples.
Planet Fitness dominates the low-cost gym segment through differentiated branding ('Judgment Free Zone®') and operational efficiency. Its $10/month membership undercuts competitors by 50-70%, driving high member retention (90%+ store-level EBITDA margins). The asset-light franchise model (90% of locations) allows for capital-efficient growth, with franchisees bearing real estate and equipment costs. However, the model lacks exclusivity territories, risking cannibalization. While PLNT excels in suburban markets, it faces challenges in urban areas where boutique fitness (e.g., Orangetheory) and premium clubs (Life Time) compete on experience. Equipment sales to franchisees provide a high-margin revenue stream but create cyclical exposure. The company’s tech stack lags behind digital-native rivals (e.g., Apple Fitness+), though its app (2M+ downloads) mitigates churn. International growth (5% of stores) remains untested against local incumbents.