Is Planet Fitness (PLNT) Pricing Look Attractive After This Year’s 33% Share Price Slide

• If you are wondering whether Planet Fitness at around US$73.80 is a bargain, a fair deal, or still looks expensive, you are asking the right question before making any move.
• The stock has seen a 0.7% slip over the last 7 days, a 7.8% decline over the past month, and is down 32.7% year to date and 23.3% over the last year, which can change how the market views its potential and its risks.
• These price moves sit against a backdrop of ongoing attention on Planet Fitness's position in the fitness sector and how its franchise model is holding up as conditions evolve. Recent coverage has focused on how the brand competes on price and scale, which investors often link to long term membership trends and capital needs.
• Right now, Planet Fitness has a valuation score of 2 out of 6, which means it screens as undervalued on only a minority of Simply Wall St's checks. Next, you will see how different valuation methods line up on the stock, followed by a way to put all of those numbers into a clearer big picture.

Planet Fitness scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Planet Fitness Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes Planet Fitness's expected future cash flows and discounts them back to what they could be worth today, using a required rate of return. It is essentially a way of asking what all those future cash flows might add up to in present dollar terms.

Planet Fitness last reported Free Cash Flow of about $250.1 million. Based on analyst inputs and further projections, Simply Wall St models Free Cash Flow rising to $503.0 million in 2030, with interim annual projections between 2026 and 2035 that are then discounted back to today using a 2 Stage Free Cash Flow to Equity framework. All figures are expressed in US$.

On this basis, the DCF model arrives at an estimated intrinsic value of about $98.59 per share. Against the current share price of roughly $73.80, this implies the stock screens as around 25.1% undervalued under these assumptions.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Planet Fitness is undervalued by 25.1%. Track this in your watchlist or portfolio, or discover 59 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Planet Fitness.

Approach 2: Planet Fitness Price vs Earnings

For a profitable company, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. It lets you quickly compare how the market prices Planet Fitness against other businesses that also generate positive earnings.

What counts as a "normal" or "fair" P/E depends on how fast earnings are expected to grow and how risky those earnings appear. Higher growth or more resilient earnings often justify a higher P/E, while more uncertainty or weaker profitability can point to a lower P/E being reasonable.

Planet Fitness currently trades on a P/E of 26.64x. That sits above the Hospitality industry average P/E of 21.11x and above the peer average of 20.82x, which suggests the market is assigning a higher earnings multiple than many comparable names.

Simply Wall St also calculates a proprietary “Fair Ratio” of 23.72x for Planet Fitness. This Fair Ratio is designed to be more tailored than a simple peer or industry comparison because it reflects factors such as the company’s earnings growth profile, its risks, profit margins, industry, and market capitalization.

Comparing the current P/E of 26.64x with the Fair Ratio of 23.72x points to Planet Fitness trading at a richer multiple than that custom estimate.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Planet Fitness Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach a clear story about Planet Fitness to hard numbers like your revenue, earnings and margin estimates, then translate that into a Fair Value you can compare with the current price to decide whether the stock looks attractive or stretched. Each Narrative lives on the Community page, updates automatically as fresh news or earnings arrive, and reflects very different views such as a cautious fair value around US$90 that ties to concerns about churn, competition and slower growth, versus a more optimistic fair value closer to US$164 that ties to expectations for stronger multi year revenue growth, higher margins and a richer future P/E multiple. All of this sits side by side so you can quickly see which story best fits your own view of the company.

Do you think there's more to the story for Planet Fitness? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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