Key Points
- Planet Fitness stock has risen 61% in the past year, outperforming the S&P 500’s 13% gain. Revenue grew 11.5% to $277 million in Q1 2025, with 19 new gym openings.
- Same-store sales rose 6.1%, showing strong performance in existing locations.
- Membership increased by 900,000 in Q1, totaling 20.6 million members. The asset-light franchise model supports high profitability and scalability.
- Valuation is high at a forward P/E of 35.6; dollar-cost averaging is advised for cautious investors.
In a year where the S&P 500 delivered a 13% return (as of May 21), Planet Fitness (NYSE: PLNT) has significantly outperformed, rising 61%. This growth stock is a strong performer despite broader market volatility tied to trade tensions and economic uncertainties.
In Q1 2025, Planet Fitness posted robust results. Revenue climbed 11.5% year-over-year to $277 million, driven by adding 19 net new fitness centers, increasing its total footprint to 2,741 locations globally. The company has expanded beyond the U.S. into countries like Canada, Mexico, Panama, Australia, and Spain.
More impressively, same-store sales (SSS) rose 6.1%, which indicates growing productivity in existing locations. Management projects SSS growth between 5% and 6% for 2025, with an overall revenue increase of 10%. Additionally, 160 to 170 new gyms are expected to open this year, showing continued commitment to expansion.
One major move was increasing its long-standing $10 basic membership fee to $15. Despite this, the brand’s value proposition remains compelling. Planet Fitness added 900,000 members in Q1, pushing total membership to 20.6 million. This speaks to strong product-market fit and affordability, especially important during economic downturns when consumers may cut discretionary spending.
The company’s franchise-based model, with only 10% of locations owned directly, allows for rapid expansion with limited capital investment. Franchisees benefit from the brand, operational support, and marketing resources. This asset-light structure supports high profitability, with an average operating margin of 26% over the past decade.
Despite its strengths, the stock trades at a forward P/E ratio of 35.6, a premium valuation. With projected EPS growth of 15% annually through 2027, some investors may see the stock as overvalued. It may not be a “no-brainer” buy, but dollar-cost averaging could be a prudent strategy for those seeking fitness industry exposure.
