Planet Fitness: The $10 Gym That Grew Into a Franchise Machine

PLNT: Pass, not a short. Stock -60% YTD (~$114→$48) after mgmt withdrew its 3-yr algo (low-double-digit rev / mid-teens EBITDA growth) in May—reiterated in Feb, abandoned in May, denting credibility. Debate: temporary marketing stumble vs. structural break in the growth engine. Bear case looks stronger: Q2 net joins stalled, rate drove >100% of rev growth, Black Card penetration decelerating (from ~340bps to ~210bps yr/yr)—easy upgrades largely spent, and price hikes ($10→$15 Classic) cost members. Asset-light franchise toll model intact; 2025 rev $1.3B (+12%), 29.8% op margin, FCF $0.26B (~7% of $3.6B cap). Author models mid-to-high single-digit growth (rev $1.45B/$1.54B/$1.62B 2026-28), below prior guidance. Catalyst/decision date: Q1 2027 print—need net member adds up yr/yr as proof the marketing reset works. Key risk: low-income exposure (~22% clubs in 'low income' areas) in a K-shaped economy where consumers resist even $5 hikes.

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