Key Points
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Planet Fitness has reported a slowdown in comparable club sales in the latest quarter.
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Rising competition in the affordable fitness market is impacting the company’s growth outlook.
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Despite recent declines, the stock’s current valuation offers little room for error.
Introduction
In today’s competitive fitness landscape, many gym operators are grappling with growth challenges. Planet Fitness, a leading player in the affordable fitness market, has experienced significant declines in its stock price this year. This article delves into the factors influencing Planet Fitness’s performance and evaluates whether it might be a good investment opportunity.
Shares of fitness operator Planet Fitness (NYSE: PLNT) have seen a sharp decline, dropping over 32% year-to-date. This decline has raised concerns that the company may have reached its peak.
For those considering whether this downturn has created a potential buying opportunity, it’s essential to assess Planet Fitness’s underlying business fundamentals. While it boasts a robust brand and a loyal membership, the most recent quarter revealed a slowdown in critical metrics.
Notably, Planet Fitness continues to expand and has implemented successful price increases. So, is the stock worth buying? Let’s take a closer look.
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The Current Landscape
In its latest quarterly report, Planet Fitness demonstrated continued expansion, yet the pace of growth has noticeably slowed compared to previous years.
The company’s revenue for the fourth quarter of 2025 increased by 10.5%, reaching $376.3 million. However, a crucial metric to consider for franchise businesses is comparable club sales—sales from locations open for at least a year. While Planet Fitness reported a 5.7% growth in this category, it remains below the full-year growth rate of 6.7% from 2025.
Revenue gains for this quarter also fell short of the 12.1% overall growth seen throughout the entire year. This decline indicates a shift away from the high single-digit and double-digit growth rates the company previously enjoyed.
Despite these challenges, 2025 witnessed the opening of 181 new Planet Fitness clubs, bringing the total close to 2,900 locations. Furthermore, the company seems to exhibit some pricing power, having added approximately 1.1 million net new members during the year—coinciding with a significant price hike for new Classic Card members.
However, success has attracted emerging competition, as rival low-cost gym chains expand aggressively, offering similar pricing and amenities. Planet Fitness, undeterred, plans to raise charges for its popular Black Card tier, which could further enhance its revenue, especially given that 66.5% of its members were Black Card holders at the end of Q4. Additionally, the company had its most successful fourth quarter in terms of new locations opened, with 104 clubs launched.
The international market presents a valuable growth opportunity for Planet Fitness. Recently surpassing 200 international clubs, the company is focusing on expanding its presence in markets like Mexico, Australia, and Spain while strategically targeting one to two new markets each year.
Is It Time to Buy?
Overall, while Planet Fitness is performing well and shows some pricing strength amidst a fiercely competitive landscape, shares are currently trading at around 28 times earnings—perhaps not low enough for a strong buy recommendation, even in light of recent drops.
With the slowdown in sales trends and growing competition in the affordable gym segment, the stock appears to be priced close to fair value rather than being a bargain. A continuation of decreasing comparable club sales or downward pressure on margins to maintain membership levels could further impact the stock negatively.
So, is it advisable to invest in Planet Fitness stock at this time? My inclination is to hold off for now. Although the company remains a robust operator with an extensive network of gyms, the stock seems somewhat expensive relative to its altered growth trajectory.
Nonetheless, it might be wise to track Planet Fitness stock for future consideration. A better entry point could emerge as market dynamics evolve.
Should You Consider Planet Fitness Stock Right Now?
Before making a purchase in Planet Fitness, consider this:
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Planet Fitness. The Motley Fool has a disclosure policy.
Conclusion
In conclusion, while Planet Fitness has faced recent challenges, including a slowdown in sales and increased competition, it continues to operate effectively within the fitness market. Potential investors would be wise to monitor the stock for future opportunities, bearing in mind the current valuation and the overall market dynamics. A more favorable buying condition may arise as the company adjusts to these market pressures.
