Analysts Eye "Buying Opportunity" on Planet Fitness Stock

At least four brokerages have hiked their PLNT price targets

May 3, 2019 at 9:17 AM
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Planet Fitness Inc (NYSE:PLNT) is bracing for a 4.5% drop out of the gate, after the fitness center operator reported a first-quarter revenue miss -- its first in at least eight quarters. Specifically, revenue rose 22.7% in the first three months of the year to $148.8 million, below the $153.4 million expected by analysts. PLNT's adjusted first-quarter profit of 35 cents per share, on the other hand, was above the consensus estimate.

Analysts don't seem too concerned, with at least four price-target hikes coming through already -- including one to $85 from $75 at Jefferies, a 12.8% premium to last night's close at $75.35. Plus, Baird maintained its "outperform" rating, telling investors to "buy any material pullbacks given Plant Fitness' attractive growth model and potential upside as 2019 progresses." Cowen also called this early earnings reaction a "buying opportunity."

Most analysts are already upbeat on PLNT stock, with 10 of 14 brokerages rating the equity a "strong buy." However, the average 12-month price target of $76.08 sits just above Wednesday's settlement.

Short sellers, meanwhile, have been throwing in the towel on the surging stock -- which has likely created tailwinds for PLNT. Short interest fell 13% in the two most recent reporting periods to 5.63 million shares. This represents a healthy 6.6% of the equity's available float, or 4.1 times the average pace of trading.

Looking at the charts, Planet Fitness stock has been in a long-term uptrend. Year-over-year, the shares have gained 83.9%, and topped out at a record high of $77.20 this past Monday, April 29. Any downside today could find support at PLNT's rising 30-day moving average, while just below here is the 40-day trendline, which has ushered the security higher over the long term.

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