VOL. XCIV, NO. 247
★ EXPANSION-STAGE STOCKS & SCALING SETUPS ★
NO ADVICE
Tuesday, January 6, 2026
Planet Fitness, Inc.
PLNT · NYSE
This analysis is generated by AI and supervised by humans. Scores reflect business model strength, scaling runway, and valuation setup. Mistakes can happen.
Overview
Franchisor and operator of Planet Fitness gyms (predominantly franchised) with recurring membership economics, a smaller corporate-owned club base, and an equipment sales segment supporting franchise growth.
Thesis summary
Planet Fitness runs a proven, capital-light franchise model with ~20.7M members and 2,795 clubs as of Sep 30, 2025. The next leg is execution-driven: sustain ~6-7% unit growth while compounding higher-margin royalties through member growth, pricing/ARPU lift, and marketing efficiency. Management's Investor Day laid out a 2026-2028 "growth algorithm" (low-double-digit revenue CAGR, mid-teens adjusted EBITDA CAGR), which-if delivered-should translate into durable operating leverage and earnings power growth.
Investment Thesis
Why Now?
The company exited 2025 with strong operating momentum and raised FY2025 outlook (revenue +11%, adjusted EBITDA +12%). It also clarified the forward playbook and targets at the November 2025 Investor Day, including specific levers to accelerate member growth and expand clubs. If the pricing and marketing initiatives land without hurting retention, the model can re-rate on "execution certainty" rather than just near-term comps.
Scaling Thesis
Scaling is about (1) repeatable development (targeting ~6-7% unit growth, supported by contracted franchise pipeline), (2) member growth in existing clubs via better marketing and value proposition, (3) monetization through pricing and mix (Classic Card and Black Card), (4) royalty-rate lift as more units roll into current contract economics, and (5) operating leverage from the high-margin franchisor model and corporate overhead discipline.
Competitive Moat
Value-price positioning + brand awareness ("Judgement Free Zone"), scale advantages (marketing reach, vendor terms), a large and reinvesting franchisee base, and a simple recurring-revenue model that performs across broad demographics and geographies.
Key Assumptions
Valuation Scenarios
Illustrative: slower member/club growth + multiple compression. 2028E revenue $1.45B, adj EBITDA margin 38%, 14x EV/adj EBITDA.
Illustrative: aligned with the company's long-term "algorithm" (execution holds). 2028E revenue $1.75B, adj EBITDA margin 41%, 20x EV/adj EBITDA.
Illustrative: strong member growth + pricing success + premium multiple. 2028E revenue $2.05B, adj EBITDA margin 43%, 24x EV/adj EBITDA.
Catalysts
FY2025/Q4 results and FY2026 guidance that reinforce the long-term 2026-2028 targets (member growth, unit growth, margin/EBITDA algorithm).
Clear follow-through on the long-term plan can de-risk the narrative and support multiple stability/expansion.
2026 shift of a portion of Local Advertising Fund contributions to the National Advertising Fund (NAF), enabling more coordinated national brand/media execution.
Improved marketing efficiency can lift member acquisition and same-club sales without proportional spend.
Monetization initiatives (Classic Card new-member price increase and ongoing Black Card mix/pricing optimization) lift ARPU while maintaining sign-up velocity.
If elasticity is low, revenue/EBITDA can compound faster than club count and improve franchisee ROI.
Sustained ~6-7% unit growth through consistent net new club openings and early-stage international scaling.
Reinforces runway and operating leverage, supporting the "execution > discovery" expansion-stage framing.
Risks
Pricing actions and/or easier cancellation flows increase churn, reducing member count and pressuring system-wide same-club sales.
Mitigation: Track member count, churn/retention commentary, and same-club sales mix (price vs. membership). Size up only after a few quarters of stable trends.
Franchisee unit economics compress (rent, labor, equipment/remodel costs), slowing new club openings or increasing operator stress.
Mitigation: Monitor net new openings vs. guidance, franchisee concentration/health, and disclosures about the development pipeline and economics.
Low-cost gym competition increases marketing intensity and/or pressures pricing, limiting member growth and ARPU upside.
Mitigation: Watch marketing efficiency, brand metrics, and relative same-club sales versus peers and local competitors.
High leverage and securitized financing structure increase sensitivity to interest rates, refinancing windows, and macro shocks.
Mitigation: Track net debt, liquidity (cash/marketables), interest expense, and refinancing actions; prefer entries when liquidity is ample and debt maturity risk is low.
Consumer protection, labor, privacy, or franchise relationship regulations raise costs or affect cancellation/retention dynamics.
Mitigation: Follow legal/regulatory disclosures and watch for changes that materially alter cancellation friction, wage costs, or franchise obligations.
Scale Readiness
Franchise model is proven; management highlighted initiatives to enhance franchise returns (economic model updates + pricing actions).
System-wide same-club sales remained strong (mid-to-high single digits in 2025 YTD) with ~20M+ members.
FY2025 outlook implies ~160-170 openings; long-term target calls for ~6-7% unit growth.
Pricing power exists, but requires careful elasticity management to avoid churn spikes.
2026 NAF shift is a key execution lever; success should show up in acquisition efficiency and retention.
International footprint exists but remains smaller vs. U.S.; needs repeatable playbook and partners.
High-margin franchisor economics and long-term targets indicate meaningful EBITDA/EPS compounding if execution holds.
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.