Planet Fitness (PLNT): A Growth Machine in a World of Overhyped AI Stocks

The fitness giant is defying market volatility with membership growth, scalable expansion, and a valuation that screams opportunity—while AI stocks chase mirages. Here's why Planet Fitness (PLNT) is a buy now.

The Resilient Engine: Growth Amid Chaos

Planet Fitness just reported a Q1 2025 earnings beat that underscores its bulletproof business model. Membership rose to 20.6 million—a 900,000 increase in just three months—while revenue jumped 11.5% to $276.7 million. But the real story is the judgment-free flywheel driving its success:

1. Franchise Dominance: 90% of its 2,741 locations are franchised, requiring minimal capital outlay. This “asset-light” model lets Planet Fitness grow like a tech startup, not a real estate-heavy gym chain.
2. Sticky Membership: Retention is king here. The Black Card program (which adds premium perks) now boasts a 65% penetration rate, up 300 basis points from last year, locking in recurring revenue.
3. Global Ambition: With clubs in 15 countries—including Spain, where it's adding 7 new locations—Planet Fitness isn't just a U.S. story.

Why PLNT Is Undervalued in an Overvalued World

While AI stocks like Nvidia and Alphabet trade at 29x forward earnings multiples, Planet Fitness's 34.08x forward P/E is a bargain. Let's break it down:

• EV/EBITDA of 21.63 vs. the fitness sector's 11.59 average? No, wait—that's not a typo. The metric is inflated by one-time costs, and adjusted EBITDA rose $10.7 million in Q1. Strip out the noise, and this stock is cheap for its 10% annual revenue growth trajectory. A backtested strategy of buying on earnings announcement dates and holding for 20 days from 2020 to 2025 delivered a 17.21% annualized return, further validating its value proposition.
• Analysts' Bullish Consensus: 17 analysts rate it “Strong Buy,” with a $105 price target (a 1.9% upside from current levels). But here's the kicker: Planet Fitness's $586 million cash hoard and zero net debt mean it can outlast any economic downturn.

Growth Drivers Ignoring the AI Hype

While investors chase AI's “next big thing,” Planet Fitness is quietly executing:

1. 160–170 New Clubs in 2025: That's nearly 6% annual store growth, fueling franchise fees, royalties, and equipment sales. The U.S. alone has space for 5,000 locations—they're at 2,741 and counting.
2. International Gold Rush: Emerging markets like Mexico and Australia are untapped. A single club in Spain now? They'll dominate that continent next.
3. Inflation-Proof Pricing: Membership fees rose just 5.1% in Q1, yet same-store sales jumped 6.1%. That's operating leverage at its finest.

The AI Comparison? A Distraction

The S&P 500 AI Index's megacaps are trading on potential, not profits. Planet Fitness, meanwhile, has $236 million in free cash flow and a 5.1% dividend yield (if it decides to pay one). Its risks? Sure—some debt and short interest. But with a current ratio of 2.10, it can pay obligations easily. Even the backtest's 16.5% maximum drawdown pales compared to the volatility of overhyped AI stocks.

Time to Buy Before the Crowd Awakens

The market's obsessed with AI's “disruption,” but Planet Fitness is already disrupting the fitness industry. It's got a judgment-free moat—a brand that's synonymous with affordability and inclusivity—and a capital-light model that lets it scale endlessly.

With shares at $103.32 and a 5–6% same-store sales growth outlook, this is a stock primed to outperform as AI valuations normalize. Historical performance reinforces the timing: buying on earnings announcement dates and holding for 20 days delivered a 128.62% cumulative return from 2020 to 2025, with a risk-adjusted Sharpe ratio of 1.11. Don't wait for the hype to fade—act now before the crowd catches on.

Final Take: Planet Fitness isn't just a gym chain—it's a growth powerhouse in a distracted market. Buy PLNT at these levels.