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Solid Comps to Aid Planet Fitness (PLNT) in Q1 Earnings

Zacks Equity Research

Planet Fitness, Inc. PLNT is scheduled to report first-quarter 2019 results on May 2, after the market closes.In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate by 6.3%. Also, it delivered average four-quarter positive earnings surprise of 9.1%.

How are Estimates Faring up in Q1?

The Zacks Consensus Estimate for first-quarter earnings is pegged at 34 cents, indicating 25.9% growth from the prior-year quarter’s reported figure. Over the past 30 days, the company’s earnings have witnessed no revisions, reflecting analysts’ concern surrounding limited upside potential of the stock. For revenues, the consensus mark stands at nearly $152.8 million, mirroring a 25.9% increase from the year-ago quarter’s reported number.

Factors at Play

The company’s revenues in the first quarter are likely to have gained from increased comparable sales. Moreover, consistent focus on partnership and international expansion to drive growth is an added positive. Planet Fitness has been consistently expanding presence through franchise agreements. While the majority of the revenue growth from expansion is expected over the long-term, the first quarter is likely to have borne the fruits of the company’s efforts in fortifying thetop line.

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Meanwhile, Planet Fitness’ same-store sales growth is impressive. During fourth-quarter 2018, the company posted the 40th straight quarter of positive same-store sales. We believe that the upside trend has continued in the first quarter of 2019.

Apart from these, increase in net member and higher average royalty rate has been driving comparable sales higher, whereas prudent pricing is likely to have driven earnings in the to-be-reported quarter.

What Does the Zacks Model Unveil?

Our proven model doesn’tpredictthat Planet Fitness is likely to beat earnings estimates this quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Planet Fitness has an Earnings ESP of 0.00% and a Zacks Rank #2, which make surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Planet Fitness, Inc. Price and EPS Surprise

 

Planet Fitness, Inc. Price and EPS Surprise | Planet Fitness, Inc. Quote

Stocks With Favorable Combinations

Here are a few stocks from the Consumer Discretionary sector that investors may consider as our model shows that these have the right combination of elements to post an earnings beat in the first quarter:

JAKKS Pacific JAKK has an Earnings ESP of +17.86% and it currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Wynn Resorts WYNN has an Earnings ESP of +2.98% and a Zacks Rank #3 at present.

Norwegian Cruise NCLH currently has an Earnings ESP of +0.53% and a Zacks Rank #3.

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Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
 
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
 
Planet Fitness, Inc. (PLNT) : Free Stock Analysis Report
 
JAKKS Pacific, Inc. (JAKK) : Free Stock Analysis Report
 
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Zacks Investment Research