Planet Fitness, Inc. (NYSE:PLNT), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NYSE. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Planet Fitness’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Planet Fitness
What Is Planet Fitness Worth?
According to my valuation model, Planet Fitness seems to be fairly priced at around 7.30% above my intrinsic value, which means if you buy Planet Fitness today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $51.60, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Planet Fitness’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Planet Fitness look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 55% over the next couple of years, the future seems bright for Planet Fitness. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has already priced in PLNT’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on PLNT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Keep in mind, when it comes to analysing a stock it’s worth noting the risks involved. For example – Planet Fitness has 2 warning signs we think you should be aware of.
If you are no longer interested in Planet Fitness, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
What are the risks and opportunities for Planet Fitness?
Earnings are forecast to grow 14.92% per year
Earnings grew by 100.7% over the past year
Debt is not well covered by operating cash flow
Negative shareholders equity
View all Risks and Rewards
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.