Bear of the Day: Planet Health (PLNT) – March 1, 2021

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Planet Fitness (PLNT short quotePLNT – – Free report) is a popular fitness center chain with a national and international presence. The company currently operates over 2,000 locations in the United States, Puerto Rico, Canada, the Dominican Republic, Panama, Mexico, and Australia.

Q4 earnings review

Planet Fitness reported disappointing results for the fourth quarter of the fiscal year back in February.

Revenue decreased 30% year over year and system-wide revenue in the same store decreased 10.6%. As the report suggests, the Covid-19 pandemic continues to weigh on PLNT’s business and the wider fitness industry.

Fourth quarter franchise revenue decreased 8.8% due to temporary store closures and lower membership, while Adjusted EBITDA decreased 33.3% to $ 51.1 million.

“While we anticipate the operating environment will remain volatile in the short term and unit growth will be modest in the short term, we are increasingly optimistic about our growth opportunities as the vaccine continues to roll out and consumers increasingly turn to everyday activities like bricks and mortar fitness return, “said CEO Chris Rondeau.

Due to the pandemic-related uncertainty, PLNT did not provide an outlook for the full year 2021.

Bottom line

PLNT is now a Zacks Rank 5 (Strong Sell).

11 analysts have slashed their full year earnings outlook in the past 60 days, and the consensus estimate has fallen 45 cents to $ 1.10 per share. Earnings and sales for the 2021 financial year are expected to increase significantly compared to the previous year, although this is to be expected after the losses in 2020.

Stocks are up only 7.2% over the last year-long period, compared to the S&P 500’s 23% gain.

As the introduction of vaccines accelerates, economic recovery is within our grasp. But that doesn’t mean that everything jumps back at once. Planet Fitness still has a tough road ahead of it to return to pre-pandemic growth. Hence, investors may want to stay on the sidelines until a return to long-term growth occurs.

Investors interested in adding a recreational and recreational stock to their portfolio might consider RV maker Camping World (CWH Quick Quote)CWH – – Free report). CHW is # 2 (Buy) in the Zacks rank with long-term earnings growth of 34.7% for the next three to five years.

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