Planet Fitness, Inc. – Value Analysis (NYSE:PLNT) : September 27, 2016

Capitalcube gives Planet Fitness, Inc. a score of 38.

Our analysis is based on comparing Planet Fitness, Inc. with the following peers – Grupo Sports World SAB de CV Class S, Zoom Companies Inc. and Town Sports International Holdings, Inc. (SPORTS-MX, ZMMM-US and CLUB-US).

Investment Outlook

Planet Fitness, Inc. has a fundamental score of 38 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • Compared to peers, relative underperformance last month is down from a median performance last year.
  • Planet Fitness, Inc. Class A currently has a negative book value but its current Price/Assets ratio of 1.15 is about median among its peers.
  • PLNT-US‘s book value of equity is not positive and suggests that that it is not meaningful to analyze its ROE versus P/E in order to determine whether the company has an operating or growth advantage.
  • PLNT-US employs relatively high amounts of assets while generating relatively median profit margins.
  • Changes in the company’s annual revenue and earnings are around the median among its peers.
  • Over the last five years, PLNT-US‘s return on assets has eroded from above median to below median among its peers suggesting declining relative operating performance.
  • While PLNT-US‘s revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median P/E ratio.
  • PLNT-US seems to be constrained by the current level of debt.

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Leverage & Liquidity

PLNT-US is debt-constrained.

  • With debt at a relatively high 37.59% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 29.73%), and interest coverage level of 3.58x, PLNT-US seems debt-constrained.
  • All 3 peers for the company have an outstanding debt balance.

PLNT-US has maintained its Some Capacity profile from the recent year-end.

  • PLNT-US‘s interest coverage is upward trending and is now similar to its five-year average interest coverage of 3.94x.
  • Compared to 2015, interest coverage has remained relatively stable for both the company (3.58x) and the peer median (0.46x).
  • PLNT-US‘s debt-EV is its lowest relative to the last five years and compares to a high of 46.72% in 2015.
  • The decrease in its debt-EV to 37.59% from 46.72% (in 2015) was also accompanied by a decrease in its peer median during this period to 29.73% from 35.66%.
  • Relative to peers, debt-EV fell 3.20 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Grupo Sports World SAB de CV Class S 21.87 0.33 1.84 53.56
Zoom Companies Inc. 2.43 0.01 -12.15 -52.08
Town Sports International Holdings, Inc. 94.67 0.85 -0.92 6.05
Planet Fitness, Inc. Class A 37.59 1.4 3.58 21.09
Peer Median 29.73 0.59 0.46 13.57
Best In Class 2.43 1.4 3.58 53.56

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Company Profile

Planet Fitness, Inc. operates and franchises fitness centers. It operates through the following segments: Franchise, Corporate-Owned Stores, and Equipment. The Franchise segment includes operations related to the company’s franchising business in the U. S., Puerto Rico, and Canada. The Corporate-Owned Stores segment deals with the operations with respect to all corporate-owned stores throughout the U. S. and Canada. The Equipment segment sells equipment to franchisee-owned stores. The company was founded by Michael Grondahl and Marc Grondahl in 1992 and is headquartered in Newington, NH.


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