Tip: NEVER Invest Into A Criminal Organization! (I've already posted my PLNT thesis on here. Some will remember it. Also, it is in the PLNT archives in the servers here.)
$ 89.37+0.38 (+0.43%)
BEARISH!
P
PLNT now has a market cap of $533 per member (ignoring debt).
Do people not realize the franchisees get 93% of the membership fee? It doesn't even show up as revenue for the corporation. The most Planet Fitness makes on a Black Card member is $315.88 * 7% = $23 / year (assuming Black Card).
Given the churn rate, a reasonable lifetime value for the members is somewhere in the neighborhood of $63/ share. Which would give the whole enterprise a total valuation of around $943M or $12-$13/share.
Accounting for the $1.97B in debt this stock is worth nothing.
J
Calling all value investors - recent drop has brought the forward PE to a much more reasonable... (checks notes)... 100x. It's not a chain of gym franchises, it's it's Fitness As A Service, yeah that's it!!
P
For those who don't get it:
Peloton has a razor-and-blade business model. The *goal* is to sell hardware at a loss, knowing they will make up the loss over the next couple of years on the subscription plan. Theoretically, Peloton could give bikes and even treads away and still make money over a five-year period. That means they can and will cut prices provided the following conditions are met:
1) They need to have enough production/distribution capacity to meet the demand. (Which they did NOT have during the pandemic, but do have now) 2) They need to have a reasonable assurance that post sale churn rates will not destroy the back end profitability (the churn rates ticked up slightly post-pandemic, but not to the point selling at a loss won't work- almost everyone who has bought a Peloton is paying the subscription) 3) They have some way to raise massive amounts of CASH to invest in inventory to be sold at a loss. (IE, $1 billion stock sale they just announced)
With all of these conditions met. Peloton is now set for a price war with Echelon/iFit/Tonal/Beachbody, etc.
It may last years, and it is unclear how low prices will go. But as the price of the premium equipment drops, it will put pricing pressure on all of the mid-market and low end home exercise equipment as well. High end gyms will lose members to home fitness, and to replace them they will drop their membership rates the way LA fitness already has.
Ultimately, the pricing pressure will land on Planet Fitness. The only entity in the fitness industry that really *can't* lower their pricing any more.
J
Guided adjusted earnings to $.80 for the year... PE >100 for a gym. No judgement!
J
Forward PE over 100
M
Where the rest of the bulls at?
P
Don't see how these numbers are any good for anyone thinking rationally about the long term. Compared to 3Q 2019, revenue is still down 7.5%, members per location is still down about 8%, and net income is still down a whooping 33%.
Since this time LAST year (essentially the trough of the pandemic's impact on the business when the gyms were freshly re-opened and NOBODY was vaccinated yet): Planet Fitness has gained 0.9 million members. Not bad, but.. Peloton gained 2.6 million.
So even with all the vaccinations and temporary YAY WE CAN GO BACK TO THE GYM! enthusiasm. Home fitness still took market share.
Perhaps PTON investors are disappointed today, but that is not relevant to Planet Fitness. Losing is losing, regardless of how much money the other company makes winning.
We always knew the pandemic would end at some point, but it's pretty clear now the business model really is going obsolete.
D
TOOK PROFIT-WAS LONG WAIT-will wait and see where stock price settles before buying in again
D
PLNT NEXT SUPPORT LEVEL 74 DOLLARS AS NEW COVID STRAIN PUTS HURT ON GYM STOCKS AGAIN!!!
S
Abt to sell out 75% of my position just need the $90 to hold
K
JT has over 3100 post and Y- Finance keeps deleting my replies to his comments. Is JT a Yahoo employee?
C
Strong buy rating from institutions… no big deal … minus the fact profits are factored in for about the next 100 years 😂
J
after missing 6 quarters in a row who would beat that the 7th Q would be any differernt ?
J
B.1.1.529 = going to 60
J
Does PLNT ever not miss earning est ? if so can anyone tell the last Q that PLNT beat earnings est ?
C
Stay out of this folks as it will be another PTON.
S
Nice looking chart. Looks like we are going to challenge the old yearly high of $90.
S
The guys on CNBC's fast money were raving about PLNT today. $100 price target. Google it.
(I've already posted my PLNT thesis on here. Some will remember it. Also, it is in the PLNT archives in the servers here.)
$ 89.37+0.38 (+0.43%)
BEARISH!
Do people not realize the franchisees get 93% of the membership fee? It doesn't even show up as revenue for the corporation. The most Planet Fitness makes on a Black Card member is $315.88 * 7% = $23 / year (assuming Black Card).
Given the churn rate, a reasonable lifetime value for the members is somewhere in the neighborhood of $63/ share. Which would give the whole enterprise a total valuation of around $943M or $12-$13/share.
Accounting for the $1.97B in debt this stock is worth nothing.
Peloton has a razor-and-blade business model. The *goal* is to sell hardware at a loss, knowing they will make up the loss over the next couple of years on the subscription plan. Theoretically, Peloton could give bikes and even treads away and still make money over a five-year period. That means they can and will cut prices provided the following conditions are met:
1) They need to have enough production/distribution capacity to meet the demand. (Which they did NOT have during the pandemic, but do have now)
2) They need to have a reasonable assurance that post sale churn rates will not destroy the back end profitability (the churn rates ticked up slightly post-pandemic, but not to the point selling at a loss won't work- almost everyone who has bought a Peloton is paying the subscription)
3) They have some way to raise massive amounts of CASH to invest in inventory to be sold at a loss. (IE, $1 billion stock sale they just announced)
With all of these conditions met. Peloton is now set for a price war with Echelon/iFit/Tonal/Beachbody, etc.
It may last years, and it is unclear how low prices will go. But as the price of the premium equipment drops, it will put pricing pressure on all of the mid-market and low end home exercise equipment as well. High end gyms will lose members to home fitness, and to replace them they will drop their membership rates the way LA fitness already has.
Ultimately, the pricing pressure will land on Planet Fitness. The only entity in the fitness industry that really *can't* lower their pricing any more.
Since this time LAST year (essentially the trough of the pandemic's impact on the business when the gyms were freshly re-opened and NOBODY was vaccinated yet):
Planet Fitness has gained 0.9 million members. Not bad, but..
Peloton gained 2.6 million.
So even with all the vaccinations and temporary YAY WE CAN GO BACK TO THE GYM! enthusiasm. Home fitness still took market share.
Perhaps PTON investors are disappointed today, but that is not relevant to Planet Fitness. Losing is losing, regardless of how much money the other company makes winning.
We always knew the pandemic would end at some point, but it's pretty clear now the business model really is going obsolete.
who would beat that the 7th Q would be any differernt ?
if so can anyone tell the last Q that PLNT beat earnings est ?