Planet Fitness Stock Lifted Amid Re-Opening Optimism

PLNT has more than tripled off its March lows

by Jake Scott

Published on Jun 2, 2020 at 2:14 PM
Updated on Jun 24, 2020 at 10:16 AM

The shares of Planet Fitness Inc (NYSE:PLNT) are soaring today, up 7.6% at $72.66 at last check, after the fitness center franchise reported about 60% of its customers returned amid the reopening of around 800 gyms across the U.S. and Canada in the last week. Furthermore, the company also reported that memberships remain stable in gyms that are open, a fact that Jefferies sees as helping the stock recover to its pre-COVID-19 levels. 

On the charts, PLNT has recovered significantly since the equity hit a near three-year low of $23.77 during the broader market's mid-March pullback. Now up over 200% since that time, Planet Fitness stock boasts an impressive 48.6% quarterly gain despite coronavirus-related lockdowns keeping gyms closed for much of the last three months.  Today's rally has the shares reclaiming their 320-day moving average, a trendline that has kept a lit on breakouts since the beginning of March.

PLNT Chart June 2

Currently, analysts are extremely bullish on the equity. Of the 15 in coverage, 12 sport a "buy" or better, with zero "sells" on the books. However, the 12-month consensus price target of $68.23 is a conservative 5.8% discount to current levels, and could signal some price-target hikes in the near future that could act as additional tailwinds.

The equity is also ripe for a short squeeze. Short interest is up 35.8% in the last two reporting periods, to 9.48 million shares now sold short. This represents a healthy 11.9% of the stock's available float, and would take almost three days to cover, at its average daily pace of trading. 

In the options pits today, 6,810 calls and 1,942 puts have changed hands so far -- nearly double the average intraday amount, with volume running in the 98th percentile of its annual range. Leading the charge is the August 67.5 call, followed closely by the 72.5-strike call from the same series.


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