Planet Fitness stock price has bounced back after bottoming at $23.76 in 2020 to a high of $109.75 earlier this year. It has risen by over 305% from its lowest point in 2020, giving it a market cap of over $8.4 billion. So, what next for the PLNT share price ahead of its financial results next week?
Planet Fitness business is doing well
Planet Fitness is one of the biggest fitness companies in the US with almost 20 million users and over 2,637 clubs in the country.
The company’s business has done well in the past few years after going through its worst period during the COVID-19 pandemic.
Its annual revenue has jumped from $363 million in 2020 to over $1 billion in 2023. It has also become a highly profitable company after moving from a net loss of $15 million in 2020 to a profit of over $138 million.
Planet Fitness business has done well in a highly difficult period as many Americans have turned to weight loss drugs by companies like Novo Nordisk and Eli Lilly. Its performance is a sign that these customers are combining weight loss drugs with exercise.
PLNT earnings ahead
The next key catalyst for the Planet Fitness stock price will be its earnings, which are expected to come out on Wednesday.
Analysts expect these results to show that PLNT’s revenue rose by 13.85% in the fourth quarter to $324.5 million. This revenue growth will translate to an annual figure of $1.16 billion, a 8.73% increase from a year earlier.
Analysts also expect that Planet Fitness’ revenue will jump by 9.58% this year to $1.28 billion, a trend that will likely continue in the future.
Planet Fitness’ profit is also expected to keep growing. Its earnings per share will be 62 cents, up from 60 cents in the fourth quarter of 2023. The annual EPS will move from $2.24 to $2.51. PLNT has a long track record of beating analysts estimates.
A key concern is that Planet Fitness is a highly overvalued company even as its profits continue growing. It has a forward P/E ratio of 51.8, much higher than the industry median of 18. Its P/E non-GAAP PE ratio is 39, also higher than the sector median of 16. The company may justify this valuation if it continues growing. Analysts have an average PLNT stock target at $111.7, slightly higher than the current $96.89.
Read more: Analysts love Planet Fitness (PLNT) stock despite boycott risks
Planet Fitness stock price analysis
The weekly chart shows that the PLNT share price staged a strong comeback in the past few years. It formed an inverse head and shoulders chart pattern, a popular bullish continuation sign.
Planet Fitness stock has formed a break and retest pattern at $97, the highest swing in November 2021. It has also moved above all moving average. Therefore, the stock will likely rebound and retest the resistance at $109.75, up by 13.45% above the current level.
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