Planet Fitness Stock Surges Ahead of First Earnings Announcement

Planet Fitness will make its first financial announcement since going public after the market closes on Wednesday Photo courtesy Planet Fitness
<p>Planet Fitness will make its first financial announcement since going public after the market closes on Wednesday. (Photo courtesy Planet Fitness.)</p>

Wall Street's sharp turn lower Tuesday had no effect on Planet Fitness, Newington, New Hampshire.

While the Dow lost 469 points and closed down 2.84 percent, Planet Fitness (NYSE:PLNT) was up 5.6 percent at midday and closed up 2.41 percent at $18.24 ahead of its first earnings announcement on Wednesday. Planet Fitness will report its second quarter earnings after market close at 4:30 p.m. Eastern, marking the first financial disclosure since the company went public in August.

Planet Fitness stock has been trending higher since the $13.65 low experienced Aug. 24 when global markets reacted to fears of China's slowing economy, sparked in part due to positive analyst ratings released this week.

Credit Suisse initiated coverage and gave Planet Fitness an "outperform" rating with a $19 per share price target in a report released Monday. Credit Suisse called Planet Fitness a "unique growth story, blending a best-in-class franchise model, with a differentiated consumer proposition that supports double-digit store growth."

Consumers cited price (87 percent) and location (84 percent) as the most important factors in choosing a gym, according to a survey conducted by Credit Suisse.

"(Planet Fitness) offers the most competitive pricing, as well as the most locations vs. other low-cost players," according to the report.

Credit Suisse surveyed 527 respondents with 28 percent representing ages 18-29, 32 percent representing ages 30-44, 35 percent representing 45-59, and 6 percent representing 60-plus. Genders were even, as was geographic diversity. Sixty-five percent of the respondents had a household income between $0 and $99,000, and 19 percent of respondents reported household income over $100,000.

This Credit Suisse survey released in Monday's coverage report shows consumer factors in choosing a gym. (Graphic courtesy Credit Suisse.)

J.P. Morgan and RW Baird analysts also gave Planet Fitness positive ratings, according to a MarketWatch report. J.P. Morgan gave Planet Fitness a $20 price target, citing its franchise model as a key driver for continued growth. Baird gave a $22 price target, expecting to see more than 20 percent growth in earnings per share every year from Planet Fitness.

Other fitness-related stocks closed mixed on Tuesday.

The August slide for Fitbit, San Francisco, (NYSE:FIT), continued into September, and it closed down 4.64 percent at $32.89 on Tuesday. It marked the lowest close since $33.28 on June 29. The company, which makes wearable fitness trackers, went public in June  at $20 per share and hit a high of $51.90 per share on Aug. 5.

Brunswick Corp, Lake Forest, Illinois, (NYSE:BC), closed down 4.08 percent at $47.68 per share.  The parent company of Life Fitness is trading in a 52-week range of $38.17 to $56.63 per share.

Town Sports International (TSI), New York, (NYSE:CLUB), closed down 1.55 percent at $2.54 per share. TSI, which traded at a 52-week high of $7.69 in January, hit its 52-week low on Aug. 19 at $1.92 per share.

Mindbody, San Luis Obispo, California, (NASDAQ:MB) closed up 0.07 percent at $14.03. Mindbody, which went public in June, traded at a high of $16.25 per share on June 19 before hitting a low of $9.14 per share on Aug. 4.

ClubCorp, Dallas, (NASDAQ:MYCC), closed up 0.18 percent at $22.55. ClubCorp reached a 52-week high of $24.95 per share on July 23 after announcing record second quarter results.

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Planet Fitness has reopened 800 locations since May 1, reporting overall average membership levels have remained relatively consistent.

Club Pilates is set to open 21 new locations in June and has studios in five other locations set to open in states mandating gyms remain closed.

The 24 Hour Fitness executive team has been busy on two fronts: implementing new operating protocols to reopen clubs and reportedly looking at how bes