UBS analyst Arpine Kocharyan maintained a Buy rating on Planet Fitness today and set a price target of $125.00.
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Arpine Kocharyan has given his Buy rating due to a combination of factors influencing Planet Fitness’s current market position and future prospects. One of the key reasons is the stabilization of churn rates, which have decreased from previous highs following the implementation of the click-to-cancel feature. This stabilization suggests improved customer retention, which is crucial for sustained revenue growth.
Additionally, the demographic shift towards younger, more health-conscious customers, predominantly millennials and Gen Z, is seen as a positive trend for Planet Fitness. This shift could lead to higher engagement and potentially lower churn rates in the long term. Furthermore, the increased penetration of the Black Card membership, following a price adjustment, indicates a successful strategy in upselling premium memberships, which could enhance profitability. These factors combined support the optimistic outlook and justify the Buy rating for Planet Fitness’s stock.
Kocharyan covers the Consumer Cyclical sector, focusing on stocks such as Six Flags Entertainment Corporation, Vail Resorts, and Peloton Interactive. According to TipRanks, Kocharyan has an average return of 1.9% and a 45.61% success rate on recommended stocks.
In another report released on October 28, Morgan Stanley also maintained a Buy rating on the stock with a $119.00 price target.