PLNT

Planet Fitness Inc

Consumer


Presented:05/14/2020
Price:$51.01
Cap:$4.08B
Current Price:$82.77
Cap:$7.00B

Presented

Date05/14/2020
Price$51.01
Market Cap$4.08B
Ent Value$5.21B
P/E Ratio42.85x
Book ValueN/A
Div Yield0%
Shares O/S79.95M
Ave Daily Vol3,200,006
Short Int11.78%

Current

Price$82.77
Market Cap$7.00B
Planet Fitness, Inc. engages in the operation and franchising of fitness centers. It operates through the following segments: Franchise, Corporate-Owned Stores, and Equipment. The Franchise segment includes operations related to the company's franchising business in the United States, Puerto Rico, Canada, the Dominican Republic, Panama, Mexico, and Australia. The Corporate-Owned Stores segment comprises operations with respect to all Corporate-owned stores throughout the United States and Canada. The Equipment segment sells equipment to franchisee-owned stores. The company was founded by Michael Grondahl and Marc Grondahl in 1992 and is headquartered in Hampton, NH.

Publicly traded companies mentioned herein: Planet Fitness Inc (PLNT)

Highlights

The presenter is short Planet Fitness (PLNT), the largest high-value, low-price (HVLP) gym operator in the US (over 2k locations), due to his belief that the COVID-19 pandemic has created significant challenges/headwinds for the business over the remainder of 2020 and into 2021. Higher member churn, lower signups and equipment sales, and an inability to open new boxes at the historical pace should result in fundamental underperformance relative to Street expectations that have yet to be adjusted to reflect the impact of the pandemic on consumer behavior. This is a significant switch in sentiment for the presenter, as he has historically been bullish on PLNT due to management’s ability to execute and the strength of the HVLP model. The stock has historically traded at a lofty 30x - 40x multiple to earnings, and in a bearish scenario, PLNT’s 2021 EPS could be ~$1 (vs. the $1.84 consensus estimate). In the presenter’s opinion, the stock could trade down to the low-end of the valuation range as forecasts are adjusted downward, or $30 per share over the next 6-12 months.

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Idea Discussion

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