Planet Fitness (PLNT) Stock Forecast & Price Target

Planet Fitness reported impressive growth in its membership base, ending 2024 with 19.7 million members, reflecting a year-over-year increase of 1.0 million. The company achieved revenue growth of 10.3%, surpassing its guidance of 8-9%, while both adjusted EBITDA and net income increased approximately 12% year-over-year, indicating strong operational performance. Additionally, the rise in Black Card membership penetration to 64% and the commencement of new club openings signal a positive trajectory in profitability and expansion potential for the coming fiscal year.

Planet Fitness is facing a negative outlook primarily due to its guidance for 2025, which indicates a decline in free cash flow (FCF) stemming from significant capital expenditure growth, coupled with a projected total sales and EBITDA growth of only 10% while margins remain flat. Additionally, during the most recent quarter, corporate-owned clubs underperformed by $5 million, which raises concerns about profitability in the core segment despite a noted outperformance in franchise and equipment segments. Furthermore, external factors such as unfavorable weather, challenging macroeconomic conditions, and potential negative changes in franchisee economics may adversely impact membership growth, casting doubt on the company’s ability to meet its updated guidance and potentially harming management's credibility.