Planet Fitness (PLNT) Stock Forecast & Price Target

Planet Fitness has demonstrated a substantial increase in its Gen Z member penetration, which has grown by 400 basis points over the past five years to constitute 29% of its member base. The company's Q2 results indicated robust performance, as signups and workout participation are reportedly outpacing the previous year, signaling improved utilization rates. Additionally, the swift growth in membership at new locations, such as the Savannah, GA club reaching 5,000 members within its first year, reinforces the positive trajectory of the brand’s market expansion.

Planet Fitness is experiencing a decline in rejoining rates, with figures dropping from 38% in Q3 and 37% in Q4 to the mid-30s in Q1 and Q2, indicating a potential weakening of member retention. Despite a noted decline in the percentage of individuals citing financial reasons for not joining, from 21% in June to 14% in the current month, this may not be sufficient to offset the observed decrease in resumption rates. The reliance on its Corporate-owned stores segment, which generates a majority of revenue, raises concerns about the company’s ability to sustain growth amid these challenges.