Consumer Discretionary
PLNT is well positioned in the growing high‑value‑low‑price gym segment with scale and ample runway for growth. New CEO Colleen Keating brings relevant hospitality franchise experience to drive the next phase of growth in the US and internationally. Gen Z is the fastest‑growing membership cohort for the company, supported by initiatives like the “High School Summer Pass”. PLNT continues to refine club formats and contractual terms to improve efficiency and unit economics. 2Xideas expects 2024-31E system‑wide sales CAGR of 11.7%, driven by 6.6% annual net unit growth and 5.0% same‑club sales growth. They forecast an 11.1% EBITDA CAGR and a 44.6% margin in 2031E. European expansion remains an upside not reflected in their forecasts. They see 17.2% annualised total returns based on an exit NTM P/E of 28.0x (17.7x EV/EBITDA).
Edition: 223
- 31 October, 2025
Consumer Discretionary
How many names in the Consumer space can you point to with under-consumption in its category during Covid while still running below long term trend, idiosyncratic drivers to accelerate unit and comp growth, countercyclical elements as the low-price leader in its space and a flywheel that drives sustained unit growth with stable, high growth in FCF? Cash generation will fuel growth and consistent stock buybacks creating downside protection. These assets are rare and Hedgeye thinks PLNT can easily command a high teens EBITDA multiple for years to come with sustainable mid-teens EBITDA growth and 25%+ EPS growth. That builds to a stock of $130-160 three years out (vs. ~$80 today).
Edition: 193
- 23 August, 2024