Planet Fitness, Inc. (NYSE:PLNT), is not the largest company out there, but it saw a decent share price growth of 14% on the NYSE over the last few months. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Planet Fitness’s outlook and valuation to see if the opportunity still exists.
Is Planet Fitness Still Cheap?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.2% below our intrinsic value, which means if you buy Planet Fitness today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $112.02, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Planet Fitness’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Planet Fitness look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Planet Fitness’ earnings over the next few years are expected to increase by 58%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? PLNT’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on PLNT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Planet Fitness, you’d also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Planet Fitness and we think they deserve your attention.
If you are no longer interested in Planet Fitness, you can use our free platform to see our list of over 50 other stocks with a high growth potential.