Here's Why Planet Fitness (PLNT) is a Strong Growth Stock

Planet Fitness (PLNT) is identified as a strong growth stock by Zacks, possessing a Growth Style Score of A and projecting 12% year-over-year earnings growth for the current fiscal year. The company, with nearly 20 million members and over 2,700 clubs as of December 2024, holds a Zacks Rank of #3 (Hold) but benefits from upward earnings estimate revisions, with the consensus for fiscal 2025 increasing to $2.90 per share, suggesting potential upside for growth-focused investors.

Analysis

Planet Fitness (PLNT) is currently assigned a Zacks Rank #3 (Hold), indicating a neutral short-term outlook based on earnings estimate revisions. However, the company exhibits strong underlying growth potential, evidenced by a Growth Style Score of 'A' and a VGM Score of 'B'. Zacks highlights a projected 12% year-over-year earnings growth for the current fiscal year for PLNT. Furthermore, the earnings outlook for fiscal 2025 has seen positive momentum, with two analysts revising their estimates upwards in the last 60 days, resulting in the Zacks Consensus Estimate for that period standing at $2.90 per share. Planet Fitness has also demonstrated a track record of outperformance, boasting an average earnings surprise of 6.9%. Operationally, as of December 31, 2024, the company reported a significant scale with approximately 19.7 million members and 2,722 clubs, with about 90% of these locations being franchisee-owned. According to Zacks' methodology, a #3 ranked stock like PLNT, when accompanied by strong Style Scores such as 'A' or 'B', can still present upside potential for investors.

Key Decisions for Investors

• Investors with a growth focus should consider PLNT's 'A' Growth Style Score and its projected 12% year-over-year earnings growth as positive indicators, despite the current Zacks Rank #3 (Hold).
• It is advisable to monitor upcoming earnings reports and further analyst estimate revisions for fiscal 2025 to confirm the continuation of the positive earnings trajectory, supported by the recent upward revisions and a 6.9% average earnings surprise.
• Given the neutral 'Hold' rating, investors might view PLNT as a potential component of a diversified portfolio, weighing its robust growth indicators against the absence of a stronger 'Buy' signal from the Zacks Rank system.