Breaking Down Planet Fitness, Inc. (PLNT) Financial Health: Key Insights for Investors

Are you an investor keeping a close watch on the fitness industry? Have you considered the financial health of Planet Fitness, Inc. (PLNT)? With a 10.3% increase in total revenue, reaching $1.2 billion for the fiscal year 2024, and system-wide sales climbing to $4.8 billion, it's crucial to understand the key metrics that drive this growth. But how does their debt of €2.26 Billion impact their overall stability, especially with a negative shareholder equity of $-215.4M? Dive in to explore a detailed analysis of PLNT's financial performance and what it means for your investment decisions.

Planet Fitness, Inc. (PLNT) Revenue Analysis

Understanding the financial health of Planet Fitness, Inc. (PLNT) requires a detailed look into its revenue streams. A strong understanding of where revenue comes from and how it has changed over time can give investors key insights. In 2024, Planet Fitness demonstrated solid financial performance with notable increases in revenue and membership.

Here's a breakdown of Planet Fitness, Inc.'s revenue streams:

• Membership Dues: This constitutes the largest portion of Planet Fitness's revenue.
• Franchise Royalties: Planet Fitness also earns significant revenue through franchise royalties.
• Equipment Sales: A portion of revenue is generated from equipment sales, primarily to franchisee-owned clubs.

For the fiscal year ended December 31, 2024:

• Total revenue increased by 10.3% to $1.2 billion, up from $1.1 billion in the prior year.
• System-wide same club sales increased by 5.0%.
• The company added 1 million net new members, bringing the total to 19.7 million members.

A closer look at the segments reveals:

• Franchise Segment: Revenue increased by 9.1% to $423.2 million from $387.9 million.

In the fourth quarter of 2024, Planet Fitness saw:

• Total revenue increase of 19.4% to $340.5 million.
• System-wide same club sales growth of 5.5%.

Here's a summary of Planet Fitness's revenue growth over recent years:

For additional insights, explore Mission Statement, Vision, & Core Values of Planet Fitness, Inc. (PLNT).

Planet Fitness, Inc. (PLNT) Profitability Metrics

Here's an analysis of Planet Fitness, Inc. (PLNT)'s profitability, incorporating key financial data from 2024:

Gross Profit:

• For the year 2024, Planet Fitness reported a gross profit of $0.985 billion, which is an 11.71% increase compared to 2023.
• Planet Fitness's gross profit margin for the quarter that ended in December 2024 was 48.81%.
• The gross profit margin averaged 59.5% from fiscal years ending December 2020 to 2024.

Operating Profit:

• The operating income for the year 2024 was $324.20 million, reflecting an 18.81% increase year-over-year.
• Planet Fitness Inc faced margin deterioration, primarily through cost control. Operating Margin fell in IV. Quarter 2024 to 26.36 % from 27.8 % in III. Quarter.
• The operating income margin for the trailing 12 months ending December 31, 2024, was 27.44%, a 7.72% increase year-over-year.

Net Profit:

• In 2024, the net income attributable to Planet Fitness, Inc. was $172.0 million, or $2.00 per diluted share.
• This represents a 24.39% increase from 2023.
• Adjusted net income increased 12.4% to $223.8 million, or $2.59 per diluted share, compared to $199.0 million, or $2.24 per diluted share, in the prior year period.
• Planet Fitness Inc net profit margin of 13.97 % is currently ranking no. 13 in Hotels & Tourism industry, ranking no. 111 in Services sector.

Trends in Profitability Over Time:

• Gross profit margin peaked in December 2021 at 63.3% over the last 5 years.
• The 5-Year average Growth Rate of Gross Margin for Planet Fitness was 0.90% per year.
• Revenue exceeded analyst estimates by 1.4%.
• Earnings per share (EPS) also surpassed analyst estimates by 4.1%.

Comparison with Industry Averages:

• PLNT's Gross Margin % is ranked better than 61.64% of 769 companies in the Travel & Leisure industry.
• Industry Median: 43.79 vs PLNT: 52.05.
• Planet Fitness Inc current PE on trailing twelve month basis is above Hotels & Tourism industry average.

Operational Efficiency:

• Total revenue increased from the prior year period by 10.3% to $1.2 billion.
• System-wide same club sales increased 5.0%.
• System-wide sales increased to $4.8 billion from $4.5 billion in the prior year period.

Explore more about Planet Fitness, Inc. (PLNT) and its investors: Exploring Planet Fitness, Inc. (PLNT) Investor Profile: Who’s Buying and Why?

Planet Fitness, Inc. (PLNT) Debt vs. Equity Structure

Understanding how Planet Fitness, Inc. (PLNT) finances its operations and growth is crucial for investors. This involves examining the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt versus equity to fund its activities. Let's delve into these key aspects of Planet Fitness, Inc. (PLNT)'s financial structure.

As of December 31, 2024, Planet Fitness, Inc. (PLNT) reported the following debt levels:

• Total long-term debt: $2.04 billion
• Current portion of long-term debt: $12.82 million

The debt-to-equity ratio is a significant metric for assessing financial leverage. As of December 31, 2024, Planet Fitness, Inc. (PLNT)'s debt-to-equity ratio can be calculated using the total liabilities and total equity figures from its balance sheet.

Here’s a snapshot of the relevant data from the balance sheet as of December 31, 2024 (in thousands):

Based on this data, the Debt-to-Equity Ratio is calculated as follows:

Debt-to-Equity Ratio = Total Liabilities / Total Equity = $2,796,446 / $421,703 = 6.63

A debt-to-equity ratio of 6.63 indicates that Planet Fitness, Inc. (PLNT) has a substantial amount of debt compared to its equity. Generally, a high ratio suggests a more aggressive financing strategy, which can amplify both gains and losses. It's important to compare this ratio against industry averages and competitors to gauge whether Planet Fitness, Inc. (PLNT)'s leverage is within a reasonable range. Different industries have different norms, so context is key.

Recent financial activities provide insights into how Planet Fitness, Inc. (PLNT) manages its debt. Although specific credit ratings and refinancing activities require up-to-date information, monitoring these aspects helps in understanding the company's financial strategy and risk profile. Analyzing these activities can reveal how Planet Fitness, Inc. (PLNT) optimizes its capital structure.

Planet Fitness, Inc. (PLNT) strategically balances debt and equity to fund its growth and operations. While debt financing can provide capital for expansion and other investments, equity funding helps maintain a healthy balance sheet and reduces financial risk. The company's approach to balancing these two forms of financing is a critical factor in its long-term financial stability and growth potential.

For more detailed insights, you can check out: Breaking Down Planet Fitness, Inc. (PLNT) Financial Health: Key Insights for Investors

Planet Fitness, Inc. (PLNT) Liquidity and Solvency

Assessing Planet Fitness, Inc. (PLNT)'s financial health requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations.

Here's a breakdown of key liquidity metrics for Planet Fitness:

• Current Ratio: As of December 2024, Planet Fitness had a current ratio of 2.08. This ratio measures a company's ability to pay short-term obligations with its current assets. Generally, a current ratio between 1 and 3 is considered healthy, indicating good short-term financial strength.Mission Statement, Vision, & Core Values of Planet Fitness, Inc. (PLNT).
• Quick Ratio: The quick ratio, which excludes inventories from current assets, was 2.06 as of December 2024. This provides a more conservative view of liquidity, focusing on the most liquid assets to cover short-term liabilities.
• Cash Ratio: The cash ratio was 1.642.

These ratios suggest that Planet Fitness is well-positioned to meet its short-term liabilities.

Analysis of Working Capital Trends:

Working capital is the difference between a company's current assets and current liabilities. Monitoring trends in working capital can provide insights into a company's operational efficiency and short-term financial health.

Factors that influenced Planet Fitness's net working capital change in 2024 include:

• A $1.47 million increase in inventory.
• A $40.26 million increase in receivables.
• A $9.1 million increase in creditors.
• A $2.87 million increase in other current assets.
• A $1.94 million increase in other current liabilities.
• A $31.7 million increase in others.

Cash Flow Statements Overview:

An examination of cash flow statements reveals the trends in operating, investing, and financing activities.

Here’s a summary of Planet Fitness's cash flow activities for 2024:

The operating cash flow indicates the cash generated from the company's core business activities. Investing cash flow typically involves capital expenditures and acquisitions, while financing cash flow includes activities related to debt, equity, and dividends.

Potential Liquidity Concerns or Strengths:

Considering the data available, Planet Fitness exhibits several liquidity strengths:

• Healthy Ratios: Both the current and quick ratios are comfortably within acceptable ranges, suggesting a strong ability to cover short-term obligations.
• Positive Operating Cash Flow: Consistent generation of cash from operations supports the company's liquidity position.
• Strategic Initiatives: Initiatives such as the New Growth Model and adjustments to membership pricing are expected to enhance long-term financial health.

However, there are potential challenges to consider:

• Increased Construction Costs: Rising construction costs could impact franchisee profitability, potentially affecting future revenue streams.
• Membership Growth: There are some concerns about a slight softening in membership growth.

Overall, Planet Fitness demonstrates a solid liquidity position, supported by healthy financial ratios and positive cash flow from operations. While challenges such as rising construction costs and potential softening in membership growth exist, strategic initiatives are in place to mitigate these concerns.

Planet Fitness, Inc. (PLNT) Valuation Analysis

Determining whether Planet Fitness, Inc. (PLNT) is overvalued or undervalued requires a look at several key financial metrics and market indicators. Here's an overview of the valuation analysis:

Price-to-earnings (P/E) Ratio:

• The latest twelve months P/E ratio for Planet Fitness is 44.4x.
• The P/E ratio for fiscal years ending December 2020 to 2024 averaged 281.7x.
• The P/E ratio hit its 5-year low in December 2024 of 44.4x.
• Nasdaq estimates the P/E ratio for 2024 as 36.22, with estimates for 2025, 2026, and 2027 at 32.35, 27.51, and 24.12, respectively.

Price-to-book (P/B) Ratio:

• The P/B ratio as of April 2025 is -38.2.
• The average P/B ratio from 2020 to 2024 was -26.6x.
• The P/B ratio hit its 5-year low in December 2023 of -41.0x.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

• Planet Fitness's latest twelve months EV/EBITDA is 21.3x.
• The EV/EBITDA for fiscal years ending December 2020 to 2024 averaged 33.1x.
• The EV/EBITDA hit its 5-year low in December 2023 of 19.4x.

Stock Price Trends:

• Planet Fitness stock has shown strong performance in 2024, with approximately 37.3% growth year-to-date.
• In December 2024, the stock closed at $100.20, which was about 2.6% below its 52-week high and 84.4% above its 52-week low.
• As of April 17, 2025, the stock price was $93.81.

Dividend Yield and Payout Ratios:

• Planet Fitness does not currently pay a dividend.

Analyst Consensus on Stock Valuation:

• The consensus rating from analysts is 'Moderate Buy'.
• The average twelve-month price target from 18 analysts is $101.72, with a high forecast of $123.00 and a low forecast of $71.00.

Additional Valuation Measures:

• Price-to-Sales (P/S) ratio as of April 11, 2025, is 6.97.
• The company has an Enterprise Value to EBITDA ratio of 21.18 as of 2024.

Here is a table summarizing key valuation ratios for Planet Fitness:

For more detailed insights, you can read the full analysis at: Breaking Down Planet Fitness, Inc. (PLNT) Financial Health: Key Insights for Investors

Planet Fitness, Inc. (PLNT) Risk Factors

Understanding the risks facing Planet Fitness, Inc. (PLNT) is crucial for investors assessing the company's financial health and future prospects. These risks span both internal operational challenges and external market forces.

Key risks impacting Planet Fitness, Inc. (PLNT) include:

• Intense Industry Competition: The fitness industry is highly competitive. Planet Fitness, Inc. (PLNT) faces competition from a variety of sources, including other large fitness chains, smaller regional and local gyms, and alternative fitness options such as home workout programs and digital fitness apps. Increased competition could lead to pricing pressure, reduced membership growth, and decreased profitability.
• Changing Consumer Preferences: Consumer preferences in the fitness industry are constantly evolving. Trends such as boutique fitness studios, specialized workout classes, and virtual fitness experiences could divert members away from traditional gym models like Planet Fitness, Inc. (PLNT). The company's ability to adapt to these changing preferences and offer innovative services will be critical for maintaining its competitive edge.
• Economic Downturns: Economic downturns can significantly impact Planet Fitness, Inc. (PLNT)'s membership base. During periods of economic uncertainty, consumers may reduce discretionary spending, including gym memberships. This could lead to decreased membership numbers and revenue.
• Franchise Model Risks: As a heavily franchised business, Planet Fitness, Inc. (PLNT) relies on its franchisees to operate and maintain the quality of its gyms. Issues with franchisee performance, such as poor management, failure to adhere to brand standards, or financial difficulties, could negatively impact the company's reputation and financial results.
• Data Security and Privacy: Planet Fitness, Inc. (PLNT) collects and stores significant amounts of member data, including personal and financial information. A data breach or cyberattack could result in financial losses, reputational damage, and legal liabilities.

Mitigation strategies or plans (if available):

• Continuous Innovation: Planet Fitness, Inc. (PLNT) must continuously innovate its offerings to stay relevant and attract new members. This could include introducing new workout programs, incorporating technology into the gym experience, and offering more flexible membership options.
• Franchisee Support and Oversight: Planet Fitness, Inc. (PLNT) should provide strong support and oversight to its franchisees to ensure consistent quality and adherence to brand standards. This could include providing training, operational guidance, and financial assistance.
• Investments in Cybersecurity: Planet Fitness, Inc. (PLNT) needs to invest in robust cybersecurity measures to protect member data and prevent data breaches. This includes implementing advanced security technologies, conducting regular security audits, and training employees on data security best practices.

For more detailed insights into Planet Fitness, Inc. (PLNT)'s financial health, you can explore: Breaking Down Planet Fitness, Inc. (PLNT) Financial Health: Key Insights for Investors

Planet Fitness, Inc. (PLNT) Growth Opportunities

Planet Fitness, Inc. (PLNT) demonstrates promising future growth prospects driven by several key factors. These include continuous product innovations, strategic market expansions, potential acquisitions, and well-crafted strategic initiatives and partnerships.

Key growth drivers for Planet Fitness, Inc. (PLNT) are:

• Product Innovations: Planet Fitness consistently introduces new workout programs and amenities to attract and retain members.
• Market Expansions: The company strategically expands its footprint by opening new locations in both existing and new markets.
• Acquisitions: Planet Fitness may pursue acquisitions to grow its market share and expand its service offerings.

Future revenue growth projections and earnings estimates suggest a positive outlook for Planet Fitness, Inc. (PLNT). While specific figures can fluctuate based on market conditions and company performance, analysts generally expect continued growth in revenue and earnings per share (EPS) in the coming years.

Strategic initiatives and partnerships further enhance Planet Fitness, Inc. (PLNT) growth potential:

• Partnerships: Collaborations with fitness-related brands and technology companies can enhance the member experience and attract new customers.
• Strategic Initiatives: Focus on digital fitness offerings and personalized workout plans can drive engagement and retention.

Planet Fitness, Inc. (PLNT) possesses several competitive advantages that position it favorably for future growth:

• Brand Recognition: A well-established brand name and reputation attract a broad customer base.
• Affordable Pricing: A low-cost membership model appeals to budget-conscious consumers.
• National Footprint: A widespread network of locations provides convenience and accessibility.

Here’s a look at some potential future growth metrics for Planet Fitness, Inc. (PLNT):

For more insights into Planet Fitness, Inc. (PLNT) investors, check out: Exploring Planet Fitness, Inc. (PLNT) Investor Profile: Who’s Buying and Why?