Planet Fitness (NYSE:PLNT) has had a difficult 12 months, retreating by double-digit percentages as the S&P 500, powered by tech stock gains, marched steadily higher. Despite falling share prices, though, the gym chain has continued to deliver solid results and still appears to have a considerable moat around its business. Is Planet Fitness stock undervalued, and could now be the time to buy PLNT?
How Is Planet Fitness Performing?
Planet Fitness has seen strong growth over long periods of time, with the business currently sitting on 18 consecutive quarters of revenue growth and 15 quarters of earnings growth. Since 2015, the year it went public, the gym chain has managed to build its revenues from about $380 million to a current trailing 12-month total of almost $1.2 billion.
Q3 was another respectable quarter for the business, with revenues rising 13.0 percent to just over $330 million. Same-club sales increased by an encouraging 6.9 percent, while 35 new clubs opened through Planet Fitness’ system. On the basis of this performance, management raised its full-year revenue growth guidance from 10 percent to 11 percent. Q3 also saw net income grow appreciably, reaching $59.2 million against $42.4 million in the year-ago quarter.
Year-end statistics released on January 12th gave a preliminary view of the overall performance Planet Fitness turned in during 2025. Memberships at the end of the year totaled 20.8 million, up from 19.7 million a year earlier. The business also opened 181 new clubs in 2025, an acceleration from the 150 clubs it opened in 2024. As of the end of the year, the total number of Planet Fitness clubs, including both franchised and corporate-owned clubs, stood at 2,896.
The Planet Fitness Moat
Although Anytime Fitness is the largest gym chain by number of locations, Planet Fitness is the world’s largest gym chain by membership at approximately four times Anytime’s member count. Planet Fitness has achieved this feat through extremely successful marketing and delivering significant value for its customers. In addition to its exercise facilities, Planet Fitness also offers amenities such as tanning beds and massage chairs for its higher-level members, creating perks that encourage standard members to upgrade to more expensive memberships.
With Planet Fitness already significantly outperforming its closest competitors in terms of membership, the business likely enjoys large barriers to new competition. Planet Fitness, already having almost 3,000 locations, would be a difficult business for a newcomer to the industry to displace. Due to the nature of their business, Planet Fitness and other gym chains also have an effective protection from the digital disruption that impacts many businesses these days.
Planet Fitness is also supported by significant secular growth trends. In recent years, American consumers have grown increasingly interested in health and fitness, with 82 percent of consumers now saying that they prioritize wellness. An estimated one in four Americans, roughly 77 million people, also belonged to a gym as of 2024.
The expansions of wellness spending and gym membership are both being driven, in large part, by an increasingly health-conscious Gen Z. With these consumers still young and gradually moving toward their peak earning years, businesses like Planet Fitness that become part of Gen Z’s routine spending on health and fitness could see years of solid revenues ahead as a result. While Millennials are still the largest segment of Planet Fitness’ customer base, Gen Z is the fastest-growing, showing that the brand is continuing to attract valuable younger consumers.
PLNT’s Price and Expected Upside
At first glance, Planet Fitness doesn’t look like a particularly cheap stock. Despite being off by about 16.5 percent in the last 12 months, shares of PLNT still trade at 37.2 times earnings, 37.8 times cash flow and 6.0 times sales.
Analysts, however, remain very bullish on Planet Fitness. The range of price forecasts for PLNT runs from a low of $100 to a high of $185, with the consensus at $130.18. Considering that the stock’s most recent trading price was $91.04, this range of targets implies an upside of anywhere from about 10 percent to over 100 percent. The average price forecast would see PLNT gain about 43 percent. Unsurprisingly, Plant Fitness’s consensus rating leans overwhelmingly toward buy, with 12 of the 14 analysts covering the stock rating it as a buy and the remaining two issuing hold ratings.
It’s also important to consider that PLNT has managed to carry significantly higher P/E ratios than it currently commands over many years. Although high by comparison to many stocks, the current P/E ratio is about as low as it has been since mid-2021. Even prior to the severe disruptions of the COVID-19 pandemic, PLNT spent 2017-2019 trading at significantly higher P/E ratios than what prevails today.
Is Now the Time to Buy PLNT?
Although it lacks the ultra-high growth outlook of the tech stocks that attract the most investor attention these days, Planet Fitness could have a surprisingly compelling long-term thesis behind it. Due to an increase in online sign-ups, Planet Fitness is reducing the lobby size in its new clubs, reducing the cost to build and maintain its locations going forward. With this lower-cost approach to new clubs, its existing dominant market position and strong organic growth, Planet Fitness is expected to deliver compounded annual EPS growth of over 17 percent through the next 3-5 years.
Investors may also be encouraged by Planet Fitness’ share repurchasing activity. Toward the end of last year, the business announced a new $500 million share repurchase authorization for 2025, as well as a $350 million accelerated share buyback of about 2.5 million shares from Citibank. By allocating cash to repurchasing shares at a time when they could be undervalued, Planet Fitness has the opportunity to create considerable value for shareholders while also putting upward pressure on its per-share earnings.
Putting these attractive characteristics together with the seemingly robust trend of consumers prioritizing health and fitness and PLNT’s lower-than-usual valuation at the moment, Planet Fitness could be an appealing choice for buy-and-hold investors. Though it’s unlikely to surge all at once, PLNT could produce respectable compounding returns over many years as its membership and club count continue to grow.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.