Planet Fitness Stock Up 37% in 2024: Will the Rally Continue in 2025?

Planet Fitness, Inc. PLNT has outshined the broader market in 2024, delivering an impressive 37.3% growth year to date. This performance not only eclipses the S&P 500’s robust 25.3% climb but also leaves the industry’s growth of 21% in the dust.

On Monday, the stock closed at $100.20, only 2.6% below its 52-week high but 84.4% above its 52-week low. In 2024, other industry players like Xponential Fitness, Inc. XPOF, Life Time Group Holdings, Inc. LTH and OneSpaWorld Holdings Limited OSW have gained 0.5%, 45.6% and 40.4%, respectively.

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Technical indicators imply PLNT’s continued strong performance. The stock is trading above its 50-day moving average, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in PLNT’s financial health and prospects.

The company has been benefiting from the new growth model. The new growth model, which the company’s management has been working on since 2023, has borne fruit moving into 2024 and now when 2025 is around the corner.

The primary objective of this new growth model is to enhance returns from new stores without significantly impacting its P&L. The plan focuses on reducing capital requirements for opening and operating the company’s franchises and identifying ways to lower operating expenses. This will grant franchisees increased flexibility and resources to expand their store portfolios for long-term growth. During the third quarter of 2024 earnings call, Planet Fitness stated that the new clubs built or underwent an equipment replacement cycle during this and the previous quarter mainly realized cost benefits for the new growth model.

Planet Fitness’ membership is primarily available through two membership cards, the Classic White Card and the premium Black Card. In June 2024, the company increased its Classic White Card membership price to $15 from $10, after undergoing a disciplined data-driven approach of pricing tests since the middle of 2023. The price change after 26 years bodes well and is expected to offer long-term benefits even if there is any near-term softness in net member growth. Planet Fitness expects that the existing clubs will witness a low to mid-single-digit percentage increase in the top line after about a year of the new price implementation.

To expand its presence, Planet Fitness has been focusing on strategic partnerships and international expansions. With the ongoing process of opening its first European club in Barcelona, Spain, alongside entering a joint venture in Mexico to develop new stores over the next five years in the market, Planet Fitness is tapping into new markets and expanding in the existing ones. Moreover, the company has set its sights on New Zealand with plans to open new club locations over the next several years.

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In the past 60 days, the Zacks Consensus Estimate for 2024 and 2025 has witnessed upward revisions of 2.9% and 3.5% to $2.50 and $2.93, respectively. The company’s earnings in 2024 and 2025 are likely to witness growth of 11.6% and 17% year over year, respectively. On the other hand, the company’s sales in 2024 and 2025 are expected to increase 8.9% and 10.1% year over year, respectively.

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Planet Fitness’ strong performance in 2024 indicates a combination of effective strategic initiatives, including new growth model that optimizes franchise operations, cost management and international expansion. The company’s disciplined pricing adjustments and focus on delivering value to both franchisees and members position it for sustainable growth. With positive earnings momentum, expanding global reach and robust market sentiment, Planet Fitness demonstrates a solid foundation for continued success. These factors make it an attractive investment for those seeking a growth-oriented stock with strong fundamentals and long-term potential. The company currently has a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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